Shri Dinesh Mills Ltd., Baroda V. The Addl. CIT.,Range -4,, Baroda

ITA 2993/AHD/2013

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8043 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 28-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 16-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Depreciation; Earning of tax free income; Proportionate interest; Revenue expenditure
• Section: 142(1); 14A; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NOS: 77 & 3317/AHD/2014 (ASSESSMENT YEARS: 2010-11) THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-4, BARODA V/S M/S. DINESH MILLS LTD. P B NO.2501 PADRA ROAD BARODA-390020 (APPELLANT) (RESPONDENT) ITA. NOS: 3318 & 3218/AHD/2014 (ASSESSMENT YEAR: 2011-12) THE ASSTT. COMMISSIONER OF INCOME TAX CIRCLE- 2(1)(1), BARODA M/S. DINESH MILLS LTD. P B NO.2501 PADRA ROAD BARODA-390020 V/S V/S M/S. DINESH MILLS LTD. P B NO.2501 PADRA ROAD BARODA-390020 THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-4, BARODA (APPELLANT) (RESPONDENT) ITA. NO: 2993/AHD/2013 (ASSESSMENT YEAR: 2010-11) M/S. DINESH MILLS LTD. P B NO.2501 PADRA ROAD BARODA-390020 V/S ADDITIONAL COMMISSIONER OF INCOME TAX,RANGE-4, BARODA (APPELLANT) (RESPONDENT) ITA NOS. 299 3/AHD/13 AND ORS. . A.YS. 2010-1 1 & 1011-12 2 PAN: AADCS 3115Q APPELLANT BY : SHRI S. N. SOPARKAR & PARIN SHAH, AR RESPONDENT BY: SHRI SUBHASH BAINS, CIT/ D.R. ( )/ ORDER DATE OF HEARING : 12 -04-201 8 DATE OF PRONOUNCEMENT : 28 -06-2018 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THESE FOUR APPEALS HAVE BEEN FILED BY THE REVENUE A ND ASSESSEE AGAINST EACH OTHER. SINCE ISSUES ARE COMMON AND FIGURES AND ASSE SSMENT YEARS ARE DIFFERENT, THEREFORE FOR THE SAKE OF CONVENIENCE, WE WOULD LIK E TO DISPOSE OF ALL FOUR APPEALS BY WAY OF A COMMON ORDER. ITA NO. 77/AHD/2014 FOR A.Y. 2010-11 REVE NUES APPEAL. 2. DEPARTMENT HAVE TAKEN FOLLOWING GROUNDS: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS. 21,301/- MADE U/S. 14A R.W.R. 8D WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE COULD NOT S UBSTANTIATE ITS CLAIM WITH CORROBORATIVE EVIDENCE. 2 (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS. 1,04,67,285/- BEING IN TEREST ON THE INVESTMENT MADE IN THE SUBSIDIARY COMPANY BY INVOKING THE PROVISIONS O F SECTION 40(A)(2)(B) OF THE INCOME TAX ACT. ITA NOS. 299 3/AHD/13 AND ORS. . A.YS. 2010-1 1 & 1011-12 3 (II) THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSEE COULD NOT PROVE THE BUSINESS EXPEDIENCY IN MAKING INVESTMENT IN SHARES OF ITS SUBSIDIARY COMPANY AND THAT THE ASSESSING OFFICER HAS PROVED B EYOND DOUBT THAT THE INVESTMENT IN SHARES OF ITS SUBSIDIARY 'COMPANY HAS BEEN MADE TO GIVE UNDUE ADVANTAGE TO ITS SUBSIDIARY COMPANY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS. 3,15,78,873/- MADE BY THE AO BY INVOKING PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, WITHOUT APPRECIATI NG THE FACT THAT THE ASSESSEE WAS PAYING COMMISSION TO THE DEALERS WITHIN THE MEANING OF SECTION 194H ATTRACTING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 3. THE FACTS OF THE CASE ARE THE ASSESSEE IS ENGAGED I N THE BUSINESS OF MANUFACTURING AND OTHERWISE DEALING IN WORSTED (WOV EN BLENDED) MADE PRIMARILY FROM WOOL, ALSO ENGAGED IN MANUFACTURING AND OTHERWISE DEALING IN FELT, BLANKET AND FILTER FABRIC. 4. THE ASSESSEE HAS CLAIMED EXEMPT DIVIDEND INCOME AMO UNTING TO RS.1,30,38,588/-. ON FURTHER VERIFICATION, IT WAS S EEN THAT THE ASSESSEE HAD NOT MADE DISALLOWANCE U/S 14 A OF THE ACT AS PRESCRIBED IN RULE 8D OF THE I T RULES, 1962. AS PER THE PROVISIONS OF SECTION 14A O F THE INCOME-TAX ACT, 1961, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF EXPENDI TURE INCURRED BY THE ASSESSEE IN RESPECT TO INCOME WHICH DOES NOT FORM P ART OF THE TOTAL INCOME. THE METHOD OF COMPUTING THE EXPENDITURE RELATING TO EXEMPTED INCOME HAS BEEN PRESCRIBED UNDER RULE 8D. THEREFORE VIDE NOTIC E U/S 142(1) DATED 14.9.2012, THE ASSESSEE WAS ASKED TO FURNISH THE DE TAILS OF EXPENSES W.R.T. INCOME CLAIMED AS EXEMPT AND ALSO TO EXPLAIN THE DE DUCTION INADMISSIBLE IN TERMS OF SEC.!4A R.W RULE 8D OF THE ACT. ITA NOS. 299 3/AHD/13 AND ORS. . A.YS. 2010-1 1 & 1011-12 4 5. IN REPLY, ASSESSEE STATED THAT NO EXPENDITURE HAS B EEN INCURRED TO EARN TAX FREE INCOME AND HENCE, NO DISALLOWANCE CAN BE MADE U/S.1 4A. AND IN SUPPORT OF ITS CONTENTION, ASSESSEE FILED DETAIL PAPER BOOK BE FORE THE A.O. AND HE WAS NOT AGREED WITH THE CONTENTION OF THE ASSESSEE AS THER E WERE NO EXPENSES TOWARDS EXEMPTED INCOMES COULD NOT BE ACCEPTED. THE ASSES SEE WAS USING THE FUNDS FOR INVESTMENT, OFFICE PREMISES, INFR ASTRUCTURE, MAN POWER, ETC. IN EXEMPTED INCOME EARNING ACTIVITIES, APART FROM USIN G THEM FOR OTHER INCOME EARNING ACTIVITIES. THE ASSESSEE HAS NOT PROVED THA T THE INVESTMENT ON WHICH EXEMPTED INCOME EARNED WAS CLEARLY OUT OF NON-INTER EST BEARING FUND. IN THE SUBMISSION THE ASSESSEE HAS WORKED OUT AN AMOUNT OF RS.31,34,416/-- FOR DISALLOWANCE, IT MEANS THAT THE ASSESSEE HAS ITSELF ADMITTED THAT THERE IS NEXUS BETWEEN THE INVESTMENT MADE FOR EARNING THE EXEMPTE D INCOME AND INTEREST BEARING FUND AND ALSO EXPENDITURE HAS BEEN MADE FOR EARNING THE EXEMPTED INCOME AND FINALLY WITH THE FOLLOWING WORKING:- 6. AND THE A.O. MADE ADDITION OF RS. 82,13,693/-. 7. DURING ASSESSMENT PROCEEDINGS, IT IS NOTED THAT THE RE IS AN INVESTMENT WITH DINESH REMEDIES LTD. [A SUBSIDIARY COMPANY COVERED UNDER THE PROVISIONS OF SECTION 40A(2)(B)] AND CLOSING BALANCE IS RS.11,01, 81,950/-. OUT OF RS.11,01,81,950/-, THE ASSESSEE HAS INVESTED RS.1,5 7,41,000/- IN THE CURRENT FINANCIAL YEAR. IT IS NOTED THAT THE ASSESSEE HAS N OT CHARGED ANY INTEREST ON THE ABOVE SAID INVESTMENT IN ITS SUBSIDIARY COMPANY. VI DE ORDER SHEET ENTRY DATED 26.11.2012, THE ASSESSEE WAS REQUESTED TO EXPLAIN A S TO WHY THE PROPORTIONATE INTEREST EXPENSE SHOULD NOT BE DISALLOWED FOR INTER EST FREE INVESTMENTS OF BORROWED FUNDS IN A SUBSIDIARY COMPANY. IN RESPONSE TO SAID NOTICE, ASSESSEE STATED THAT ITA NOS. 299 3/AHD/13 AND ORS. . A.YS. 2010-1 1 & 1011-12 5 '.......... THE INVESTMENT IN EQUITY IN DINESH REME DIES LTD. AMOUNTING TO RS.1,57,41,000/- HAS BEEN MADE OUT OF THE INTERNAL ACCRUALS OF THE C OMPANY DURING THE CURRENT FINANCIAL YEAR. NO SPECIFIC LOAN HAS BEEN TAKEN TO INVEST IN THE SA ID COMPANY. THE FACT THAT NO INCOME WAS EARNED DURING THE YEAR FROM THE SAID INVESTMENT IN THE PARTICULAR YEAR DOES NOT MEAN THAT NO BENEFIT SHALL ACCRUE TO THE ASSESSEE COMPANY IN THE FUTURE. THE INVESTMENT HAS BEEN MADE KEEPING IN MIND THE PRUDEN T BUSINESS PRACTICE. DURING THE YEAR UNDER CONSIDERATION, THE COMPANY HA S OUTSTANDING BALANCE OF TERM LOAN AMOUNTING TO RS.30,80,59,987/- OF WHICH RS.14,04,23 ,191/- WAS BORROWED IN CURRENT FINANCIAL YEAR. THE SAID LOAN HAS BEEN TAKEN FOR PU RPOSE OF PURCHASING MACHINERY. INTEREST PAID BY THE ASSESSEE COMPANY AMOUNTING TO RS.1,68,50,9247- IS TOWARDS THE TERM LOAN TAKEN IN THE EARLIER YEARS AS WELL AS IN THE CURRENT YEAR AND THE SAME BE ALLOWED AS REVENUE EXPENDITURE U/.3 6(III) OF THE IT /ACT, 1961. THE ENTIRE FUNDS FROM THE BORROWINGS HAVE BEEN USED FOR THE PURPOSE OF BUSINESS ONLY AND HENCE EXPENDITURE ON THE SAME BE ALLOWED U/S.36(III) OF THE IT ACT,1961. IN OUR CASE, IT IS NOT A LOAN TO GIVEN TO THE SUBSI DIARY COMPANY, DINESH REMEDIES LTD. BUT IT IS AN INVESTMENT IN EQUITY SHA RE CAPITAL TO THE SUBSIDIARY COMPANY. . 8. BUT CONTENTION OF THE ASSESSEE WAS NOT ACCEPTABLE T O THE A.O. AND LD. A.O. MADE AN ADDITION OF RS. 1,04,67,285/- U/S. 40A(2)(B ). ITA NOS. 299 3/AHD/13 AND ORS. . A.YS. 2010-1 1 & 1011-12 6 9. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS SEEN THAT THE ASSESSEE HAS DEBITED THE EXPENDITURE OF RS.5,26,80,876/- ON ACCO UNT OF DISCOUNT UNDER THE HEAD SELLING AND OTHER EXPENSES IN THE PROFIT & LOS S ACCOUNT. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF DISCOUNT AND AS SESSEE HAS FURNISHED THE FOLLOWING DETAILS: PARTICULARS RS. RS. A. CASH DISCOUNT CASH DISCOUNT - FELT 1,18,67,989/- 1,63,88,983/- CASH DISCOUNT - FILTER FABRICS 1,28,738/- CASH DISCOUNT - SUITING 43,92,256/- B. DISCOUNT DISCOUNT - SUITING 1,54,60,327/- 3,62,91,858/- SPECIAL DISCOUNT - SUITING 10,80,690/- SPECIAL DISCOUNT - FELT 44,26,627/- SPECIAL DISCOUNT - SUITING (SCHEME) 1,49,65,007/- CUSTOMER COMPLAINT-SUITING 67,358/- SETTLEMENT OF GARMENT COMPLAINT - SUITING 2,19,000/- DISCOUNT - FILTER FABRICS 72,849/- 5 , 26,80 / 841/- 10. AFTER GOING THROUGH THE AFORESAID CHART, ASSESSEE W AS FURTHER ASKED TO SHOW DIFFERENCE IN ITEM A & B AND ASSESSEE HAS EXPLAINED THAT CASH DISCOUNT IS PAID UPFRONT TO THE CUSTOMERS AS WELL AS TO THE DEALERS, IF A PARTICULAR BILLS ARE PAID BEFORE THE DUE DATE. SIMILARLY, THE DISCOUNT SHOWN IN (B) ABOVE, EXCEPT FOR ITA NOS. 299 3/AHD/13 AND ORS. . A.YS. 2010-1 1 & 1011-12 7 CUSTOMER COMPLAINT & SETTLEMENT OF GARMENT COMPLAIN T, THE OTHER ITEMS ARE IN THE NATURE OF SPECIAL DISCOUNT PAID TO WHOLESALERS / DEALERS ON SPECIAL SCHEMES LIKE, YEARLY INCENTIVES / DISCOUNT, YEARLY WINTER & SUMMER INCENTIVE / DISCOUNT, SPECIAL INCENTIVE / DISCOUNT ETC. ON VERIFICATION OF THE LAST YEAR RECORDS, IT WAS SEEN THAT THE ASSESSEE WA S ITSELF SHOWING THESE EXPENSES AS INCENTIVE AND SPECIAL INCENTIVE. FURTHER, IT WAS NOTICED THAT OUT OF THE ABOVE EXPENSES, THE ASSESSEE HAS PAID THE AMOUNT OF RS.3, 15,78,873/- (DISCOUNT - SUITING : RS.1,54,60,327/-, SPECIAL DISCOUNT - SUIT ING : RS.10,80,690/-, DISCOUNT - RS.72,849/-, SPECIAL DISCOUNT - SUITING (SCHEME) : RS.1,49,65,007/-). THE ABOVE AMOUNTS FILTER FABRICS : ARE ON ACCOUNT OF SP ECIAL SCHEMES, WHERE THE DEALERS ARE REQUIRED TO LIFT, CONTAIN QUANTITY AS W ELL/AS QUALITY OF PRODUCTS OF THE COMPANY DURING THE CERTAIN PERIODS. THE TERMS & CON DITIONS ARE FIXED BY THE COMPANY. IF A PARTICULAR DEALER FULFILL THE TERMS & CONDITIONS, THEN HE IS PAID AT THE END OF CERTAIN PERIOD OR YEAR END ON THE BASIS OF THE TOTAL TURN OVER BY THEM. THOUGH, IN ITS SUBMISSION DURING THE COURSE O F ASSESSMENT PROCEEDINGS, IT IS STATED AS SPECIAL DISCOUNT, THERE IS NO SUCH 'CONNOTATIONS' USED IN ITS BOOKS OF ACCOUNT AND ALL THESE EXPENSES ALONG WITH COMMISSION PAID ARE CLUBBED TOGETHER UNDER THE HEAD SELLING & OTHER EXP ENSES. IT MAY ALSO BE MENTIONED THAT IN EARLIER ASSESSMENT YEAR, INFORMAT ION U/S. 133 (6) WERE COLLECTED FROM SOME OF THE DEALERS AND FROM THEIR A CCOUNTS STATEMENT, IT WAS SEEN THAT SUCH AMOUNTS WERE SHOWN AS YEARLY INCENTI VE, YEARLY WINTER INCENTIVE ETC. AND NOT SHOWN AS CASH DISCOUNT OR TR ADE DISCOUNT. THEREFORE, IT WAS NOTICED THAT THESE INCENTIVES WERE LIABLE FO R TDS U/S 194 H OF THE ACT. AND FURTHER ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE PROVISION OF SECTION 40(A)(IA) OF THE ACT SHOULD NOT BE APPLIED WITH REGARD TO INCENTIVE OF RS. 3,15,78,873/-. IN VIEW OF THE ABOVE, ASSESSEE STATED THAT ITA NOS. 299 3/AHD/13 AND ORS. . A.YS. 2010-1 1 & 1011-12 8 THE ASSESSEE COMPANY HAS PAID DISCOUNT OF RS. 154.6 0 LACS TO ITS VARIOUS WHOLESALERS/DEALERS. THE AMOUNT PAID TO DEALER IS N OT IN THE NATURE OF COMMISSION. THE COMPANY HAS ITS TEXTILE DIVISION MANUFACTURING SUIT ING AND OTHER CLOTHES. THE SAME TEXTILES ARE SOLD BY VARIOUS INDENTING AGENTS, WHO ARE APPOI NTED IN VARIOUS TERRITORIES AND VARIOUS STATES. SUCH INDENTING AGENTS ARE PROCURING ORDERS FROM VARIOUS DEALERS AND RETAILERS SPREAD OVER ACROSS THE COUNTRY IN VARIOUS CITIES. BASED ON THE ORDERS PROCURED BY SUCH AGENTS, THE COMMISSION IS PAID TO THEM AND ON SUCH COMMISSION T .D.S. IS DEDUCTED AND PAID TO GOVERNMENT IN TIME. HOWEVER, NO COMMISSION OR ANY O THER PAYMENT IN NATURE OF COMMISSION AT ALL IS PAID TO DEALERS. THE DISCOUNT IS PAID TO THE DEALERS, WHO ARE SELLIN G TEXTILES/FABRICS OF THE COMPANY BASED ON THE TARGET IN TERMS OF QUANTITY, QUALITY, BRAND AND VALUE ACHIEVED BY THEM. SUCH TURNOVER TARGETS ARE FIXED BY THE COMPANY BASED ON MONTHLY/Y EARLY BASIS. THE DEALERS ARE ALSO SELLING OTHER LEADING TEXTILE MILL'S SUITING LIKE THAT OF R AYMONDS, REID & TOY LOR AND OTHER MILLS. WHEN THE CUSTOMERS COME, THE DEALER WOULD INSIST ON SOME KIND OF MATERIALS ON WHICH THEY GET BETTER PROF IT. THEREFORE, THESE ARE THE DISCOUNTS TO ENCOURAGE THEM TO SELL OUR PRODUCT. THE SYSTEM IS THAT GOODS ARE SUPPLIED / SOLD TO SUCH DE ALERS ON THE BASIS OF THE PROCUREMENT OF ORDERS PROVIDED BY THE AGENTS. SUCH PRODUCTS ARE SU PPLIED TO THEM AT OUR MILL'S PRICE. THE DEALERS ARE ALSO GIVEN SUGGESTED M.R.P. AT WHICH TH EY SELL THE GOODS. THE DIFFERENCE IS THEIR PROFIT OR MARGIN. WHEN THE GOODS ARE SOLD, THEIR AC COUNT IS DEBITED AND WHEN THE PAYMENT IS RECEIVED FROM THEM THEIR ACCOUNT IS CREDITED. INCEN TIVES ARE PAID BY CHEQUE OR BY ADJUSTING THE DIFFERENCE IN PAYMENTS. THE DISCOUNTS ARE GIVEN TO THEM BY US TO WHOLESALERS/DEALERS SINCE THE TRANSACTION IS PRINCIPAL TO PRINCIPAL BASIS. THERE ARE NO CONTRACTUAL BASIS WHATSOEVER AND THE ENTITLEMENT OF COMMISSION IS ONLY TO THE INDENTING AGENTS AS EXPLAINED ABOVE. WITH THIS BACKGROUND KINDLY APPRECIATE THE WORDINGS OF SEC. 1 94H, EXPLANATION (I), WHICH HAS CLEARLY PROVIDED THAT, FOR THE PURPOSE OF THIS SECTION COMM ISSION OR BROKERAGE INCLUDES ANY PAYMENT RECEIVED OR RECEIVABLE DIRECTLY OR INDIRECTLY, BY T HE PERSON ACTING ON BEHALF OF ANOTHER PERSON FOR SERVICES RENDERED OR FOR ANY SERVICES IN THE COURSE OF BUYING OR SELLING GOODS IN RELATION TO ANY ITA NOS. 299 3/AHD/13 AND ORS. . A.YS. 2010-1 1 & 1011-12 9 TRANSACTION RELATING TO ANY ASSETS, VALUABLE, ARTIC LES OR THING. IN OUR CASE THE DEALERS ARE NOT AT ALL ACTING ON OUR BEHALF AND ARE NOT AT ALL RENDERI NG ANY SERVICES IN COURSE OF BUYING OR SELLING OF GOODS IN RELATION TO ANY TRANSACTION. THE DISCOU NTS ARE IN THE NATURE OF REBATE / DISCOUNT / REDUCTION IN MILL'S PRICE AT WHICH GOODS WERE SUP PLIED. THEY ARE STRICTLY IN THE NATURE OF REBATE AND REDUCING OUR SALES PRICE. IN VIEW OF THIS WE HAVE TO RESPECTFULLY SUBMIT THAT PROVISIONS OF SEC. 194H ARE NOT AT ALL ATTRACTED AND CONSEQUENTIAL PROVISIONS OF SEC. 40A( IA) ARE ALSO NOT ATTRACTED AS THERE IS NO LIABILITY TO DEDUCT ANY T.D.S. DISCOUNT ON FELT SALES: WE SUPPLY THE FELT TO VARIOUS PAPER MILLS WHICH ARE OUR CORPORATE CLIENTS AND GOVERNMENT COMPANIES. WE ALLOW REBATE / DISCOUNT ON THE FELT S OLD TO CLIENTS DIRECTLY AND WE DO NOT HAVE ANY AGENTS AND/OR BROKERS FOR BOOKING OF THE ORDERS FOR FELT SALES AND THEREFORE THE REBATE REBATE / DISCOUNT ALLOWED TO CUSTOMERS IS NOTHING B UT REDUCTION IN THE SALES PRICE ONLY. THE FELTS SO SUPPLIED BY US IS TOTALLY CONSUMED BY OUR CUSTOMERS IN THEIR MANUFACTURING PROCESS/ACTIVITIES OF PAPER INDUSTRIES. THESE TRANS ACTIONS ARE PURELY ON THE BASIS OF PRINCIPLE TO PRINCIPLE AND NO AGENT OR THIRD PARTY SERVICE IS IN VOLVED IN THIS. WE AGAIN REITERATE THAT THE REBATE / DISCOUNT ALLOWED IS ONLY A REDUCTION IN TH E SALE PRICE AND NOTHING ELSE. 11. BUT LD. A.O. WAS NOT AGREED WITH THE CONTENTION OF THE A.O. AND MADE ADDITION OF RS. 3,15,78,873/-. 12. AGAINST THE SAID ADDITION, ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) WHO PARTLY ALLOWED THE APPEAL OF THE ASSESSE E. 13. NOW APPEAL IS BEFORE US. 14. SO FAR GROUND WITH REGARD TO DELETING THE ADDITION OF RS. 21,301/- MADE U/S. 14 A READ WITH RULE 8D IS CONCERNED, THE ASSESSEE HAS CLAIMED EXEMPT DIVIDEND ITA NOS. 299 3/AHD/13 AND ORS. . A.YS. 2010-1 1 & 1011-12 10 INCOME OF RS. 13038588/- AND THAT WAS EARNED FROM N ON INTEREST BEARING FUNDS AND ASSESSEE HAS NOT MADE ANY EXPENDITURE IN ORDER TO EARN ABOVE SAID INCOME. ON SIMILAR FACTS, ITAT DECIDED MATTER IN FAVOUR OF ASSESSEE IN ITA NO. 2313 & 2504/AHD/2011 AND A LUMP SUM DISALLOWANCE OF RS. 20 ,000/- WAS MADE. THEREFORE WITH CONSONANCE TO THE AFORESAID ITAT ORD ER, WE DISMISS THIS GROUND OF APPEAL OF THE DEPARTMENT. 15. SO FAR GROUND RELATED TO DELETING THE ADDITION OF R S. 10467285/- BEING INTEREST ON INVESTMENT MADE IN SUBSIDIARY COMPANY BY INVOKIN G PROVISIONS OF 40A(2)(B) OF INCOME TAX ACT IS CONCERNED, LD. A.O. HAD DISCUSSED AT PAGE NO. 5 TO 7 AND LD. CIT(A) HAS DISCUSSED AT PAGE NO. 17 TO 18. IN THIS GROUND LD. CIT(A) FOLLOWS ASSESSMENT YEAR 2008-09 AND ASSESSME NT YEAR 2009-10 IN FAVOUR OF ASSESSEE AND THEREAFTER ITAT ALSO DECIDED MATTER IN FAVOUR OF ASSESSEE IN ITA NO. 2313 & 2504/AHD/2011 FOR ASSESSMENT YEAR 20 08-09. THEREFORE, ON THE BASIS OF CONSISTENCY, WE DISMISS THIS GROUND OF APPEAL OF THE DEPARTMENT. 16. SO FAR GROUND RELATED TO DELETING ADDITION OF RS. 3 1578873/-BY INVOKING PROVISIONS OF SECTION 40(A)(IA) IS CONCERNED, LD. C IT(A) FOLLOWS ASSESSMENT YEAR 2008-09 & 2009-10 IN FAVOUR OF ASSESSEE AND THEREAF TER ITAT ALSO DECIDED SIMILAR ISSUE IN ITA NO. 2313 & 2504/AHD/2011 FOR A SSESSMENT YEAR 2008-09 IN FAVOUR OF ASSESSEE. THEREFORE FOLLOWING THE ITAT ORDER, WE ARE NOT INCLINE TO GIVE ANY RELIEF TO THE DEPARTMENT. 17. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT IS DI SMISSED. ITA NO. 3317/AHD/2014 FOR A.Y. 2010-11 REV ENUES APPEAL 18. DEPARTMENT HAS TAKEN FOLLOWING GROUNDS: ITA NOS. 299 3/AHD/13 AND ORS. . A.YS. 2010-1 1 & 1011-12 11 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. . C.I.T. (A) ERRED IN DELETING THE ADDITION OF RS. 82,13,693 MADE U/S. 14A R.W. RULE 8D WITHOUT CONSIDERING THE FACTS THAT IN A MIXED SYS TEM OF ACCOUNTING THE IDENTIFICATION OF MONEY EMPLOYED TOWARDS EXEMPTED AND NON -EXEMPTED INCOMES CANNOT BE MADE. 2.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, LEARNED CIT(A) ERRED IN DIRECTING THE AO NOT TO CO NSIDER THE INVESTMENT MADE IN HDFC FIXED MUTUAL FUND AND HDFC CASH MANAGEMENT F UND FOR THE PURPOSE OF COMPUTATION OF DISALLOWANCE OUT OF INTEREST PAID AS PER SUB CLAUSE (II) TO CLAUSE 2 OF RULE 8D, BUT TO CONSIDER THESE INVESTMENTS FO R MAKING DISALLOWANCES AS PER CLAUSE (III) TO CLAUSE 2 OF RULE 8D WITHOUT APPRECI ATING THE FACT THAT AS PER RULE 8D(II)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 HAS TO BE TAKEN FOR COMPUTING THE DISALLOWANCE UNDER SUB CLAUSE CLAUSE(II) OF CLA USE (2) OF RULE 8D. 2.2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE, A ND IN LAW, LEARNED CIT(A) ERRED IN DIRECTING FOR NOT CONSIDERING THE INTEREST PAID ON TERM LOAN OF RS 1,68,50,925/- FOR COMPUTATION AS PER RULE 8D WITH OUT APPRECIATING THE FACT THAT AS PER RULE 8D(II)A AMOUNT OF EXPENDITURE B Y WAY OF INTEREST OTHER THAN THE AMOUNT OF INTEREST INCLUDED IN CLAUSE (I) INCURR ED DURING THE PREVIOUS YEAR IS TO BE TAKEN FOR WORKING OUT DISALLOWANCE UNDER SUB-CL AUSE (II) OF CLAUSE (2) OF RULE 8D. CLAUSE (I) PERTAINS TO THE AMOUNT OF EXPENDITU RE DIRECTLY RELATING TO INCOME WHICH DOES NOT FORM PART OF TOTAL INCOME. THERE IS NO PROVISION IN RULE 8D TO EXCLUDE PART OF THE INTEREST FOR WORKING OUT THE DI SALLOWANCE U/S.14A. 19. FACTS HAVE BEEN NARRATED IN ITA NO. 77/AHD/2014 AND SO FAR GROUND RELATED TO DELETING ADDITION OF RS. 82,13,693/- MADE U/S 14 A R.W. RULE 8D WITHOUT ITA NOS. 299 3/AHD/13 AND ORS. . A.YS. 2010-1 1 & 1011-12 12 CONSIDERING FACTS THAT IN A MIXED SYSTEM OF ACCOUNT ING THE IDENTIFICATION OF MONEY EMPLOYED TOWARDS EXEMPTED AND NON-EXEMPTED IN COMES CANNOT BE MADE. LD. A.O. HAS DISCUSSED THE ISSUE AT PAGE NO. 2 TO 4 AND LD. CIT(A) HAS DISCUSSED THE ISSUE AT PAGE NO. 2 TO 13 . SINCE IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 & 2009-10 DISALLOWANCE U/S. 14A RESTRICTED TO RS. 20,000/- ON LUMP SUM BASIS BY THE ITAT AND LD. CIT( A) IN IMPUGNED YEAR FOLLOWS APPELLATE ORDER FOR ASSESSMENT YEAR 2008-09 AND ASSESSMENT YEAR 2009- 10 AND ACCORDINGLY DISALLOWANCE IN QUANTUM APPEALS ARE RESTRICTED TO RS. 20,000/-. ACCORDINGLY THIS GROUND HAS BECOME INFRUC TUOUS. 20. SO FAR GROUND WITH REGARD TO DIRECTING AO NOT TO CO NSIDER THE INVESTMENT MADE IN HDFC FIXED MUTUAL FUND AND HDFC CASH MANAGEMENT FUND FOR THE PURPOSE OF COMPUTATION OF DISALLOWANCE OUT OF INTER EST PAID AS PER SUB CLAUSE 8D(2)(II) BUT TO CONSIDER THESE INVESTMENTS FOR MAK ING DISALLOWANCES AS PER RULE 8D(2)(III) WITHOUT APPRECIATING FACT THAT RULE 8D(I I)(B) THE AVERAGE VALUE OF INVESTMENT, INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART OF TOTAL INCOME AS APPEARING IN BALANCE SHEET OF THE ASSESSEE, ON T HE FIRST DAY AND THE LAST DAY OF THE PREVIOUS YEAR HAS TO BE TAKEN FOR COMPUTING DIS ALLOWANCE UNDER SUB CLAUSE (II) OF CLAUSE (2) OF RULE 8D. 21. SO FAR GROUND RELATED TO DIRECTING FOR NOT CONSIDER ING THE INTEREST PAID ON TERM LOAN OF RS. 1,68,50,925/- FOR COMPUTATION AS PER RU LE 8D WITHOUT APPRECIATING THE FACT THAT AS PER RULE 8D(II)A AMOUNT OF EXPENDI TURE BY WAY OF INTEREST OTHER THAN AMOUNT OF INTEREST INCLUDED IN CLAUSE (I ) INCURRED DURING THE PREVIOUS YEAR IS TO BE TAKEN FOR WORKING OUT DISALL OWANCE UNDER SUB CLAUSE (II) OF CLAUSE (2) OF RULE 8D. THERE IS NO PROVISION IN RULE 8D TO EXCLUDE PART OF THE INTEREST FOR WORKING OUT THE DISALLOWANCE U/S 1 4A. LD. A.O. HAS DISCUSSED THE ISSUE AT PAGE NO. 2 TO 4 AND LD. CIT(A) HAS DIS CUSSED THE ISSUE AT PAGE NO. 2 ITA NOS. 299 3/AHD/13 AND ORS. . A.YS. 2010-1 1 & 1011-12 13 TO 13. SINCE IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 AND 2009-10, DISALLOWANCE U/S. 14A RESTRICTED TO RS. 20,000/- ON LUMP SUM BASIS AND LD. CIT(A) IN IMPUGNED YEAR FOLLOWS APPELLATE ORDER FOR ASSESSMENT YEAR 2008-09 & 2009-10 AND ACCORDINGLY DISALLOWANCE IN QUANTUM A PPEALS ARE RESTRICTED TO RS. 20,000/- BY THE ITAT . ACCORDINGLY, THIS BECAME INFRUCTUOUS. 22. IN THE RESULT, THIS APPEAL IS DISMISSED AS INFRUCTU OUS. ITA NO. 3318/AHD/2014 FOR A.Y. 2011-12 REV ENUES APPEAL 23. IN THIS CASE, REVENUE HAS TAKEN FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, LD. C.I.T. (A) ERRED IN DELETING THE ADDITION OF 89,82,597/- MAD E U/S.14A R.W. RULE 8D WITHOUT CONSIDERING THE FACTS THAT IN A MIXED SYSTEM OF ACC OUNTING THE IDENTIFICATION OF MONEY EMPLOYED TOWARDS EXEMPTED AND NON-EXEMPTED IN COMES CANNOT BE MADE. 2.1. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, AND IN LAW, LEARNED GIT(A) ERRED IN DIRECTING NOT TO CONSIDER THE INVES TMENT MADE IN HDFC FIXED MUTUAL FUND AND HDFC CASH MANAGEMENT FUND FOR COMPU TATION OF DISALLOWANCE OUT OF INTEREST PAID AS PER SUBCLAUSE (II) TO CLAUS E 2 OF RULE 8D, BUT TO CONSIDER THESE INVESTMENTS FOR MAKING DISALLOWANCES AS PER C LAUSE (HI) TO CLAUSE 2 OF RULE 8D WITHOUT APPRECIATING THE FACT THAT AS PER RULE 8 D(II)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 HAS TO BE TAKEN FOR COMPUTING THE DISALLOWANCE UNDER SUB CLAUSE CLAUSE(II) OF CLAUSE (2) OF RULE 8D. 2.2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, LEARNED CIT(A) ERRED IN DIRECTING FOR NOT CONSIDERING THE INTEREST PAID ON TERM LOAN OF RS 1,68,50,925/- FOR COMPUTATION AS PER RULE 8D WITHOU T APPRECIATING THE FACT THAT AS PER RULE 8D(II)A AMOUNT OF EXPENDITURE BY WAY OF INTEREST OTHER THAN THE AMOUNT OF INTEREST INCLUDED IN CLAUSE (I) INCURRED DURING THE PREVIOUS YEAR IS TO BE TAKEN FOR WORKING OUT DISALLOWANCE UNDE-SUB-CLAUSE (II) OF CLAUSE (2) OF RULE 8D. CLAUSE (I) PERTAINS TO THE AMOUNT OF EXPENDITURE DI RECTLY RELATING TO INCOME WHICH DOES NOT FORM PART OF TOTAL INCOME. THERE IS NO PRO VISION IN RULE 8D TO EXCLUDE PART OF THE INTEREST FOR WORKING OUT THE DISALLOWAN CE U/S.14A. 3,1 ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, LD. C.I.T. (A) ERRED IN DELETING THE ADDITION OF RS. 1,21,14,015/- , BEING INTEREST ON THE INVESTMENT MADE IN THE SUBSIDIARY COMPANY BY INVOKI NG THE PROVISIONS OF SECTION 40(A)(2)(B) OF THE I.T. ACT. 3.2 ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A ND IN LAW, LD. C.I.T. (A) ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSEE COUL D NOT PROVE THE BUSINESS ITA NOS. 299 3/AHD/13 AND ORS. . A.YS. 2010-1 1 & 1011-12 14 EXPEDIENCY IN MAKING INVESTMENT IN SHARES OF ITS SU BSIDIARY COMPANY AND THAT THE ASSESSING OFFICER HAS PROVED BEYOND DOUBT THAT THE INVESTMENT IN SHARES OF ITS SUBSIDIARY COMPANY HAS BEEN MADE TO GIVE UNDUE ADVA NTAGE TO ITS SUBSIDIARY COMPANY. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, LD. C.I.T. (A) ERRED IN DELETING THE ADDITION OF RS.3,82,04,858/- MADE BY THE A.O. BY INVOKING PROVISIONS OF SECTION 40(A)(IA) OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE WAS PAYING COMMISSION TO DEALERS WITHIN TH E MEANING OF SECTION 194H ATTRACTING THE PROVISIONS OF SECTION 40(A)(IA) OF T HE ACT. 24. FACTS HAVE BEEN NARRATED IN CONNECTED ITA NO. 77/AH D/2014 AND WE NEED NOT TO REPEAT THE SAME FOR THE SAKE OF CONVENIENCE. 25. SO FAR GROUND NOS. 1 & 2 ARE CONCERNED IN DELETING THE ADDITION OF RS.89,82,597/- MADE U/S. 14A READ WITH RULE 8D. LD. A.O. HAS DISCUSSED THE ISSUE AT PAGE NOS. 2 TO 6 AND LD. CIT(A) HAS DISCUS SED THE ISSUE AT PAGE NOS. 2 TO 19. IN THIS CASE, LD. CIT(A) FOLLOWS ASSESSMENT YEA R 2008-09 & 2009-10 AND DECIDED MATTER IN FAVOUR OF ASSESSEE AND A LUMP SUM DISALLOWANCE OF RS. 20,000/- IN ITA NO. 2313 & 2504/AHD/2011 FOR ASSESS MENT YEAR 2008-09. THEREFORE, WE DISMISS THIS GROUND OF APPEAL. 26. SO FAR GROUND RELATING TO DELETING ADDITION OF RS. 1,21,14,015/- BEING INTEREST ON THE INVESTMENT MADE IN SUBSIDIARY COMPANY BY INV OKING PROVISIONS OF SECTION 40A(2)(B)OF THE ACT IS CONCERNED, LD. A.O. HAS DISCUSSED THE ISSUE AT PAGE NOS.7 & 8 AND LD. CIT(A) HAS DISCUSSED THE ISS UE AT PAGE NOS. 19 TO 23. IN THIS CASE, LD. CIT(A) FOLLOWS ASSESSMENT YEARS 2008 -09 A& 2009-10 AND CO- ORDINATE BENCH DECIDED THE ISSUE IN FAVOUR OF ASSES SEE IN ITA NO. 2313 & 2504/AHD/2011 FOR ASSESSMENT YEAR 2008-09. THEREFOR E WE DISMISS THIS GROUND OF APPEAL. ITA NOS. 299 3/AHD/13 AND ORS. . A.YS. 2010-1 1 & 1011-12 15 27. SO FAR GROUND RELATED TO DELETING ADDITION OF RS. 3 ,821,04,858/- BY INVOKING PROVISIONS OF SECTION 40(A)(IA) OF THE ACT IS CONCE RNED, LD. A.O. DISCUSSED THE ISSUE AT PAGE NOS. 8 TO 11 AND LD. CIT(A) HAS DISCU SSED THE ISSUE AT PAGE NOS. 24 TO 28. IN THIS CASE, LD. CIT(A) FOLLOWS ASSESSMENT YEARS 2008-09 A& 2009-10 AND CO-ORDINATE BENCH DECIDED THE ISSUE IN FAVOUR O F ASSESSEE IN ITA NO. 2313 & 2504/AHD/2011 FOR ASSESSMENT YEAR 2008-09. THEREF ORE WE DISMISS THIS GROUND OF APPEAL. 28. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ITA NO. 3218/AHD/2014 FOR A.Y. 2011-12 ASS ESSEES APPEAL 29. IN THIS CASE, ASSESSEE HAS TAKEN FOLLOWING GROUNDS: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) HAS ERRED IN CONFIRMING DISALLOWANCE U/S 14A OF THE I. T. ACT READ WITH RULE 8D. IT IS SUBMIT TED THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE DETAILS FILED BEFORE YOU AND CIT(A) IT IS, ABSOLUTELY EVIDENT THAT THE ASSESSEE HAS NOT INVESTED ANY BORROWED FUNDS IN ANY ASSET. THE YIELD IS EXEMPTED AND NOT TAXABLE INCOME. IN VIEW OF THIS IT IS SUBMITTED THAT THERE IS NO JUSTIFICATION IN CONFIRMING THE DISALLOWANCE U/S 14A. IT IS SUBMITTED THAT ON THE BASIS OF BALANCE SHEE T AND MATERIALS FILED WITH THE LEARNED CIT(A), IT IS ABSOLUTELY CLEAR THAT THE APPELLANT HAD NOT INVE STED ANY BORROWED MONEY FOR EARNING ANY EXEMPT INCOME NOR INCURRED ANY EXPENDITURE TO EARN SUCH IN COME. IT IS RESPECTFULLY SUBMITTED THAT THEIR LORDSHIPS OF GUJARAT HIGH COURT IN C1T VS. RAGHUVIR SYNTHETICS LTD. 354 ITR 222 HAS HELD THAT WHEN INTE REST FREE FUNDS AVAILABLE WITH THE ASSESSEE WERE FAR GREATER THAN THE BORROWINGS THEN NO DISALLOWANC E OF INTEREST SHOULD BE MADE. IN VIEW OF THIS THE ADDITION CONFIRMED BY CIT(A) BE DELETED. 2. THE LEARNED COMMISSIONER APPEAL HAS FURTHER ERRED IN NOT DIRECTING THE LEARNED AO TO CONSIDER THE REVISED STATEMENT OF TOTAL INCOME BY W HICH THE LEARNED AO WAS REQUESTED TO CONSIDER THE ISSUE INVOLVED OF RIGHT BACK OF DEPRECIATION TW ICE WHICH WAS BY MISTAKE BY PREPARING THE STATEMENT OF TOTAL INCOME FILED WITH THE RETURN OF TOTAL INCOME. ITA NOS. 299 3/AHD/13 AND ORS. . A.YS. 2010-1 1 & 1011-12 16 IT IS FURTHER SUBMITTED THAT LEARNED CIT(A) HAS FAILED TO CONSIDER THE LETTER DATED 24.01.2014 WHEREBY THE APPELLANT POINT DOWN THAT THE EXCESS DE PRECIATION WRITTEN BACK WAS NOT REQUIRED TO BE SEPARATELY ADDED BACK. 3. THE ORDER PASSED BY C1T(A) WAS BAD IN LAW A ND CONTRARY TO THE PROVISION OF LAW AND FACTS IT IS SUBMITTED THAT THE SAME BE HELD SO NOW. 30. SO FAR GROUND NO. 1 IS CONCERNED WITH REGARD TO CON FIRMING DISALLOWANCE U/S. 14A READ WITH RULE 8D OF THE ACT IS CONCERNED, LD. A.O. HAS DISCUSSED AT PAGE NOS. 2 TO 6 AND LD. CIT(A) HAS DISCUSSED THE ISSUE AT PAGE NOS. 2 TO 19. IN THIS CASE, LD. CIT(A) FOLLOWS ASSESSMENT YEAR 2008-09 & 2009-10. THIS ISSUE HAS ALREADY DECIDED IN FAVOUR OF ASSESSEE BY THE CO-ORD INATE BENCH IN ITA NO. 2313 & 2504/AHD/2011 FOR A.Y. 2008-09 AND A LUMP SU M DISALLOWANCE OF RS. 20,000/- WAS MADE. THEREFORE, WE ALLOW THIS GROUND OF APPEAL. ITA NO. 2993/AHD/2013 FOR A.Y. 2010-11 AS SESSEES APPEAL. 31. IN THIS CASE, ASSESSEE HAS TAKEN FOLLOWING GROUNDS: (1) THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS) HAS ERRED IN CONFIRMING DISALLOWANCE U/S.14A OF THE I.T. ACT READ WITH RULE 8 D. IT IS SUBMITTED THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE DETAILS FIL ED BEFORE YOU AND CIT(A) IT IS, ABSOLUTELY EVIDENT THAT THE ASSESSEE HAS NOT INVESTED ANY BORR OWED FUNDS IN ANY ASSET. THE YIELD IS EXEMPTED AND NOT TAXABLE INCOME. IN VIEW OF THIS IT IS SUBMITTED THAT THERE IS NO JUSTIFICATION IN CONFIRMING THE DISALLOWANCE U/S. 1 4A. (2) WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMI TTED THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE U/S/.14A ONLY ON THE BAS IS OF THE ORDER PASSED BY THE CIT(A) IMMEDIATELY PRECEDING A.Y. 2009-10. IT IS SUB MITTED THAT ON THE BASIS OF THE BALANCE SHEET AND MATERIAL IT IS ABSOLUTELY CLEAR T HAT THE ASSESSEE HAS NOT INVESTED OR INCURRED ANY EXPENDITURE TO EARN INCOME NOT LIABLE TO TAX. IN VIEW OF THIS, THE ADDITION CONFIRMED U/S.14A BY CIT(A) BE DELETED. ITA NOS. 299 3/AHD/13 AND ORS. . A.YS. 2010-1 1 & 1011-12 17 (3) THE ORDER PASSED BY THE LD CIT (A) IS BAD I N LAW AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS. IT IS SUBMITTED THAT THE SAME BE HEL D SO NOW. 32. FACTS HAVE BEEN NARRATED IN CONNECTED ITA NO.77/AHD /2014 AND FOR THE SAKE OF CONVENIENCE, WE DO NOT WANT TO REPEAT THE SAME. 33. IN THIS CASE, ASSESSEE HAS TAKEN SOLITARY GROUND TH AT LD. CIT(A) HAS ERRED IN CONFIRMING DISALLOWANCE U/S. 14A READ WITH RULE 8D OF THE ACT. LD. A.O. HAS DISCUSSED THE ISSUE AT PAGE NOS. 2 TO 4 AND LD. CIT (A) HAS DISCUSSED THE ISSUE AT PAGE NOS. 2 TO 17. . IN THIS CASE, LD. CIT(A) FOLLO WS ASSESSMENT YEAR 2008-09 & 2009-10. THIS ISSUE HAS ALREADY DECIDED IN FAVOUR O F ASSESSEE BY THE CO- ORDINATE BENCH IN ITA NO. 2313 & 2504/AHD/2011 FOR A.Y. 2008-09 AND A LUMP SUM DISALLOWANCE OF RS. 20,000/- WAS MADE. THE REFORE, WE ALLOW THIS GROUND OF APPEAL. 34. IN THE RESULT, DEPARTMENTS APPEAL IN ITA NO. 77/AH D/2014, 3317/AHD/2014 AND 3318/AHD/2014 ARE DISMISSED AND ASSESSEES APPE AL IN ITA 2993/AHD/2013 AND 3218/AHD/2014 ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 28- 06- 2018 SD/- SD/- (PRAMOD KUMAR) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 28/06/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT.