DCIT, Circle-1(1)(2), Ahmedabad V. M/s. Chiripal Industries Ltd, Ahmedabad

ITA 315/AHD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2586 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 01-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed owner of house property; Earning of tax free income; Corroborative evidences; Rule 8D
• Section: 14A; 115JB; 80IA

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO.315 /AHD/2019 ASSTT.YEAR : 2015-16 M/S.CHIRIPAL INDUSTRIES LTD. SURVEY NO.199/200/1,2 SAIJPUR GOPALPUR PIRANA ROAD, PIPLEJ AHMEDABAD 382 405. PAN : AAACC 8513 B VS DCIT, CIR.1(1)(2) AHMEDABAD. ./ ITA NO.174 /AHD/2019 ASSTT.YEAR : 2015-16 DCIT, CIR.1(1)(2) AHMEDABAD. VS M/S.CHIRIPAL INDUSTRIES LTD. SURVEY NO.199/200/1,2 SAIJPUR GOPALPUR PIRANA ROAD, PIPLEJ AHMEDABAD 382 405. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI VINOD TANWANI, CIT-DR / DATE OF HEARING : 04/10/2021 /DATE OF PRONOUNCEMENT : 25/10/2021 O R D E R PER RAJPAL YADAV, VICE-PRESIDENT: THESE ARE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE AGAINST COMMON ORDER O F THE LD.CIT(A)-1, AHMEDABAD DATED 10.12.2018 PASSED FOR THE ASSTT.YEA R 2015-16. WE DISPOSE OF BOTH THESE APPEALS BY THIS COMMON ORDER. ITA NO.174 AND 315/AHD/2019 - 2 - 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. THEREF ORE, AFTER HEARING LD.DR AND CONSIDERING MATERIAL AVAILABLE ON RECORD, WE PROCEED TO DISPOSE OF BOTH THE APPEALS EX PARTE QUA THE ASSESSEE. 3. FIRST WE TAKE ASSESSEES APPEAL. 4. IN THIS APPEAL OF THE ASSESSEE, EFFECTIVE GROUND S FOR ADJUDICATION ARE GROUND NO.2 AND 4. OTHER GROUNDS ARE IN SUPPO RT OF THE RESPECTIVE MAIN GROUNDS. IN GROUND NO.2, ASSESSEE IS AGGRIEV ED BY ACTION OF THE LD.CIT(A) IN CONFIRMING DISALLOWANCE OF RS.18,20,95 1/- UNDER SECTION 14A OF INCOME TAX ACT, 1961; WHILE IN GROUND NO.4, THE ASSESSEE IS AGGRIEVED BY ORDER OF THE LD.CIT(A) IN UPHOLDING AD DITION OF RS.1,80,000/- ON ACCOUNT OF DEEMED HOUSE PROPERTY I NCOME. 5. THE GROUND NO.2 OF ASSESSEES APPEAL IS INTERCON NECTED WITH GROUND NO.2 OF REVENUES APPEAL. THE COMMON ISSUE INVOLVED IN BOTH THE GROUNDS RELATES TO COMPUTATION OF EXPENDITURE R EQUIRED TO BE DISALLOWED FOR EARNING TAX FREE INCOME. 6. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED RETURN OF INCOME ON 30.11.2015 DECLARING TOTAL INCOME AT RS.2 7,81,68,880/-. AFTER PROCESSING THE RETURN, CASE OF THE ASSESSEE WAS TAK EN UP FOR SCRUTINY ASSESSMENT BY ISSUANCE OF NOTICE UNDER SECTION 143( 2) OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE A O THAT THE ASSESSEE HAD MADE HUGE INVESTMENTS AND EARNED DIVIDEND OF RS .1,42,19,234/-, WHICH WAS CLAIMED AS EXEMPT INCOME. HOWEVER, NO SUO MOTO DISALLOWANCE WAS MADE BY THE ASSESSEE FOR EARNING E XEMPT INCOME. ON FURTHER VERIFICATION OF THE RECORD, IT WAS REVEALED TO THE AO THAT IN THE ITA NO.174 AND 315/AHD/2019 - 3 - PROFIT & LOSS ACCOUNT, THE ASSESSEE-COMPANY HAS DEB ITED INTEREST EXPENDITURE ON ACCOUNT OF INTEREST PAYMENT ON LOANS . THE LD.AO DOUBTED THE SAME AND THEREFORE, HE ISSUED SHOW CAUS E NOTICE TO EXPLAIN AS TO WHY PROVISIONS OF SECTION 14A READ WITH RULE 8D WOULD NOT BE APPLICABLE IN THE CASE OF THE ASSESSEE. IT WAS EXP LAINED BY THE ASSESSEE THAT INVESTMENT WAS MADE OUT OF OWN FUNDS CONSISTIN G OF RS.287.24 CORES, AND THEREFORE, THERE WOULD NO REASON TO MAKE DISALLOWANCE OF EXPENDITURE AND APPLICATION OF THE IMPUGNED PROVISI ONS. IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCES IN SUPPORT OF THE CLAI M OF THE ASSESSEE, THE LD.AO DID NOT ACCEPT THE EXPLANATION OF THE ASS ESSEE, AND WITH HELP OF SECTION 14A R.W.R 8D COMPUTED DISALLOWANCE EXPEN DITURE. BY APPLYING THE FORMULA PROVIDED IN RULE 8D, THE LD.AO WORKED OUT INTEREST EXPENDITURE OF RS.91,46,082/- AND RS.18,20 ,951/- TOWARDS ADMINISTRATIVE EXPENSES. THUS, THE LD.AO DISALLOWE D A TOTAL AMOUNT OF RS.1,09,67,033/- UNDER SECTION 14A R.W. RULE 8D AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 7. AGGRIEVED ASSESSEE, WENT IN APPEAL BEFORE THE LD .FIRST APPELLATE AUTHORITY. BEFORE THE LD.CIT(A) THE ASSESSEE REITE RATED SUBMISSIONS MADE BEFORE THE AO. IT WAS FURTHER CONTENDED THAT THE ASSESSEE HAD OWN FUNDS WHICH CONSISTED OF RS.287.24 TOWARDS SHAR E CAPITAL AND RESERVES & SURPLUS, AND THE AMOUNT OF RS.38.80 CORE S IN THE INVESTMENT SO MADE INCLUDED AN AMOUNT OF RS.28.79 CRORES INVES TED IN NANDAN EXIM LTD., WHICH WAS A STRATEGIC INVESTMENT WHOLLY AND EXCLUSIVELY NECESSARY FOR THE PURPOSE OF BUSINESS, AND FOR THAT REASONS THE EXEMPT CLAIMED BY THE ASSESSEE DID NOT ATTRACT PROVISION O F SECTION 14A OF THE ACT. IT FURTHER CONTENDED THAT THE ASSESSEE HAD NO T UTILIZED BORROWED OR ITA NO.174 AND 315/AHD/2019 - 4 - INTEREST BEARINGS FUNDS FOR THE PURPOSE OF INVESTME NT FOR EARNING EXEMPT INCOME, AND THEREFORE, NO QUESTION OF INVOKI NG PROVISIONS OF SECTION 14A AROSE. THE LD.CIT(A) AFTER A DETAILED DISCUSSION ALLOWED THE CLAIM OF ASSESSEE VIS--VIS DISALLOWANCE OF INTERES T OF RS.91,46,082/-, WHILE THE LD.CIT(A) UPHOLD DISALLOWANCE OF ADMINIST RATIVE EXPENSES OF RS.18,20,951/- ON THE GROUND THAT CLAIM OF THE ASSE SSEE TO MAKE DISALLOWANCE ON ADHOC BASIS WAS NOT JUSTIFIED, BECA USE THERE IS PRESCRIBED RULE UNDER 8D(III) TO COMPUTE DISALLOWAN CE @ 0.5% OF THE AVERAGE INVESTMENT. DISSATISFIED WITH ACTION OF TH E LD.CIT(A), ASSESSEE IS BEFORE THE TRIBUNAL. 8. WE HAVE HEARD THE LD.DR AND GONE THROUGH THE MAT ERIAL AVAILABLE ON RECORD AND ALSO WRITTEN SUBMISSIONS FILED BY THE ASSESSEE. THE CASE OF THE ASSESSEE WAS THAT IT HAS EARNED EXEMPT INCOME W ITHOUT INCURRING ANY EXPENDITURE, AS THE ASSESSEE HAS SUFFICIENT INT EREST FREE FUNDS AVAILABLE WITH IT FOR MAKING INVESTMENT, AND SOME O F THESE INVESTMENTS ARE IN THE NATURE OF STRATEGIC FOR THE PURPOSE OF T HE BUSINESS. THE LD.CIT(A) IN THE IMPUGNED ORDER HAS RECORDED A FIND ING THAT INVESTMENT IN SHARES OF RS.38.9 CRORES AGAINST WHICH THE ASSES SEE HAS SHARE CAPITAL OF RS.24.5 CORES AND RESERVES AND SURPLUS OF RS.262.6 CRORES, AND THEREFORE, THE ASSESSEE HAS SUFFICIENT INTEREST FREE FUNDS AVA ILABLE WITH FOR MAKING THIS MUCH INVESTMENT. UNDISPUTEDLY, BEFORE US, TH E LD.DR COULD NOT SHOW THAT THE AMOUNT OF INVESTMENT MADE BY THE ASSE SSEE IN THOSE INVESTMENTS, WHICH EARNED TAX-FREE INCOME, IS HIGHE R THAN THE AMOUNT OF SHARE CAPITAL AND FREE RESERVE AVAILABLE WITH THE A SSESSEE, NOR COULD SHOW THAT BORROWED FUNDS WERE UTILISED SO AS TO INV OKE THE PROVISIONS OF SECTION 14A OF THE ACT, THEREFORE, WE DO NOT FIN D ANY INFIRMITY IN THE ITA NO.174 AND 315/AHD/2019 - 5 - ORDER OF THE LD.CIT(A) IN DELETING THE DISALLOWANCE ON ACCOUNT ON INTEREST EXPENDITURE, AND THUS, DO NOT FIND ANY MER IT IN THE GROUND OF APPEAL RAISED BY THE REVENUE CHALLENGING DELETION O F RS.91,46,082/-. 9. AS REGARDS DISALLOWANCE OF ADMINISTRATIVE EXPENS ES OF RS.18,20,951/- IS CONCERNED, THE CASE OF THE ASSESS EE IS THAT IT HAS NOT INCURRED ANY EXPENDITURE FOR EARNING TAX FREE INCOM E. IT IS PERTINENT TO OBSERVE THAT SUB-SECTION 2 OF SECTION 14A CONTEMPLA TES THAT THE AO WOULD FIRST EXAMINE THE ACCOUNTS OF THE ASSESSEE AN D FIND OUT DETAILS OF EXPENDITURE INCURRED BY THE ASSESSEE FOR EARNING TA X FREE INCOME, AND DISALLOWED SUO MOTTO . SUB-SECTION (3) OF SECTION 14A ALSO PROVIDES THA T IN CASE WHERE AN ASSESSEE CLAIMS THAT NO EXPENDITURE H AS BEEN INCURRED BY HIM IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THIS ACT, PROVISIONS OF SUB-SECTION (2) ALSO APPLY. IF THE AO HAS NOT SATISFIED WITH WORKING OF THE ASSESSEE, THEN HE CAN TAKE RECOURSE TO RULE 8D. IN THE PRESENT CASE, THE ASSESSEE HAS NOT SUBM ITTED ANY DETAILS EXHIBITING THE EXPENDITURE INCURRED BY IT FOR EARNI NG TAX FREE INCOME OF RS.1,42,19,234/- THOUGH THE AOS APPROACH WAS NOT C ORRECT WHILE WORKING OUT DISALLOWANCE OF RS.1,09,67,033/-, BUT THE LD.CIT(A) HAS ALREADY CORRECTED THIS AND DELETED DISALLOWANCE QUA INTEREST EXPENDITURE WORKED OUT BY THE AO ON THE GROUND THAT THE ASSESSE E HAS SUFFICIENT INTEREST FREE FUNDS. HOWEVER, AT THE END OF THE AS SESSEE, NEITHER BEFORE THE AO NOR BEFORE THE CIT(A) NOR BEFORE THE ITAT, I T HAS BEEN DEMONSTRATED THAT A PARTICULAR AMOUNT OF EXPENDITUR E WERE INCURRED OR SUFFICIENT FOR EARNING THAT TAX FREE INCOME. THE A SSESSEE FAILED TO SUBMIT DETAILS OF INVESTMENT AND AS TO HOW THOSE DETAILS/I NVESTMENTS HAVE BEEN TAKEN CARE OF; WHETHER ANY EMPLOYEES ARE DEVOTED TO WARDS KEEPING ITA NO.174 AND 315/AHD/2019 - 6 - TRACK OF THE INVESTMENT OR NOT. INVESTMENT OF THIS MUCH SIZE, DOES REQUIRE CONSTANT MONITORING. IT IS QUITE IMPOSSIBL E THAT A TAX FREE INCOME OF RS.1,42,19,234/- GENERATED TO THE ASSESSEE WITHO UT INCURRENCE OF ANY ENERGY FROM THE WORK FORCE. THEREFORE, WE FIND THA T IN THE COMPELLING CIRCUMSTANCES, THE LD.CIT(A) HAS TAKEN A SHELTER BY INVOKING RULE 8D OF THE INCOME TAX RULES. 10. IT IS ALSO TO BE OBSERVED THAT THE ASSESSEE HAS RELIED UPON THE ORDER OF THE TRIBUNAL IN EARLIER YEARS, WHEREIN ACCORDING TO IT, UNDER SIMILAR CIRCUMSTANCES, DISALLOWANCES HAVE BEEN DELETED. IT IS PERTINENT TO OBSERVE THAT IN THE WRITTEN SUBMISSIONS, NO PARITY OF CIRCUMSTANCES HAS BEEN HIGHLIGHTED. THE MAGNITUDE OF EXEMPT INCOME, COST OF EMPLOYEES IN TERMS OF TRACKING QUANTUM OF INVESTMENT ETC. HAV E NOT BEEN FILED, NOR IS DISCERNIBLE FROM ORDER OF THE COORDINATE BENCH C ITED BY THE ASSESSEE. IN THIS VIEW OF THE MATTER, WE DO NOT FIND ANY INFI RMITY IN THE ORDER OF THE LD.CIT(A) ON THIS ISSUE, WHICH IS UPHELD, AND T HIS GROUND OF ASSESSEE IS REJECTED. 11. AS REGARDS FOURTH GROUND NO. I.E. CONFIRMATION OF ADDITION OF RS.1,80,000/- ON ACCOUNT OF DEEMED HOUSE PROPERTY I NCOME IS CONCERNED, WE HAVE PERUSED THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE ON THIS ISSUE. ON PERUSAL OF THE BALANCE SHEET, IT WAS REVEALED TO THE AO THAT THE ASSESSEE WAS HAVING FOUR FLATS. WHEN THE ASSESSEE WAS ASKED TO EXPLAIN ABOUT THE UTILIZATION OF THESE FLATS FOR THE BUSINESS PURPOSE, THE ASSESSEE SUBMITTED THAT THE FLATS WERE UTILIZED AS GUEST HOUSE FOR THE PURPOSE OF BUSINESS, AND NO INCOME WA S GENERATED, THEREFORE, THE SAME COULD NOT BE CLUBBED UNDER THE HEAD INCOME FROM ITA NO.174 AND 315/AHD/2019 - 7 - PROPERTY. THOUGH THE ASSESSEE HAS FAILED TO GIVE SATISFACTORY REPLY WITH ANY EVIDENCE, THE LD.AO SHOWED A LEEWAY BY CAL CULATING NOTIONAL INCOME ONLY IN RESPECT OF TWO FLATS AND TREATED REM AINING TWO FLATS AS GUEST HOUSE. THUS, AN ADDITION OF RS.1,80,000/- (R S.90000 X 2) WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE LD. CIT(A) CONFIRMED THE FINDING OF THE AO AND UPHELD THE IMPUGNED ADDITION. THIS CONFIRMATION OF ADDITION BY THE LD.CIT(A) IS UNDER CHALLENGED BEFORE THE TRIBUNAL. 12. IN THE WRITTEN SUBMISSIONS FILED BY THE ASSESSE E, IT WAS PLEADED THAT ALL FOUR FLATS ARE UTILIZED FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE, AND SIMILAR CLAIM MADE IN THE ASSESSMENT YEAR 2006-07 WAS ALLOWED IN ACCORDANCE WITH THE DIRECTION OF THE ITA T, AND THEREFORE, SIMILAR CLAIM SHOULD BE ALLOWED IN THIS YEAR AS WEL L. 13. ON THE OTHER HAND, THE LD.DR SUPPORTED ORDERS O F THE REVENUE AUTHORITIES. HE FURTHER SUBMITTED THAT SIMILAR CLA IM OF THE ASSESSEE IN THE PRECEDING TWO ASSESSMENT YEARS, WAS REJECTED UP TO TRIBUNAL I.E. IN THE ASSTT.YEAR 2011-12 TO 2012-13 IN THE ABSENCE OF SUPPORTING EVIDENCE. IN THIS YEAR ALSO, THE ASSESSEE HAS NOT SUBSTANTIAT ED ITS CLAIM WITH ANY EVIDENCE, BUT SIMPLY STATED THAT THESE FLATS WERE U TILIZED FOR THE PURPOSE OF BUSINESS AS GUEST HOUSE. THEREFORE, IMPUGNED OR DER ON THIS ISSUE DESERVES TO BE SUSTAINED. 14. ON DUE CONSIDERATION OF THE ABOVE FACTS AND CIR CUMSTANCES, WE FIND THAT THE ASSESSEE HAS NOT FILED EVIDENCE TO PR OVE ITS CLAIM THAT THE IMPUGNED FLATS WERE UTILIZED FOR THE PURPOSE OF BUS INESS AS GUEST HOUSE. THE REVENUE AUTHORITIES HAVE CONSIDERED TWO FLATS O UT OF FOUR TO BE USED ITA NO.174 AND 315/AHD/2019 - 8 - FOR THE BUSINESS PURPOSE, AND IN RESPECT OF REMAINI NG TWO FLATS NOTIONAL INCOME WAS CALCULATED AT THE RATE OF RS.90,000/- PE R FLAT, AND THUS MADE ADDITION OF RS.1,80,000/- UNDER THE HEAD INCOME FR OM HOUSE PROPERTY. BEFORE US ALSO, THERE IS NO MATERIAL PUTFORTH BY TH E ASSESSEE TO SUBSTANTIATE ITS CLAIM. SIMILAR CLAIM OF THE ASSES SEE FOR THE PRECEDING TWO ASSESSMENT YEARS I.E. 2011-12 AND 2012-13 WAS R EJECTED UPTO THE TRIBUNAL BY HOLDING THAT THERE WAS ANY MATERIAL PRO DUCED BY THE ASSESSEE DEMONSTRATING THAT PROPERTIES WERE UTILIZE D FOR THE PURPOSE AS GUEST; SO WAS THE SITUATION BEFORE US ALSO. THIS BE ING SO, IN THE YEAR UNDER OUR CONSIDERATION, WE DO NOT FIND ANY INFIRMI TY IN ORDER OF THE LD.CIT(A) CONFIRMING THE ADDITION MADE BY THE AO IN RESPECT OF DEEMED RENTAL INCOME. THUS, ORDER OF THE LD.CIT(A) ON TH IS ISSUE CONFIRMED. 15. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISS ED. 16. NOW WE TAKE REVENUES CROSS APPEAL. THERE ARE MAINLY THREE GROUNDS RAISED IN THIS APPEAL AND THE REST OF THE G ROUNDS ARE FORMAL. 17. IN THE FIRST GROUND, THE GRIEVANCE OF THE REVEN UE IS THAT THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.8,92,30,519/- MADE ON ACCOUNT OF DEDUCTION CLAIM ED UNDER SECTION 80IA OF THE ACT. 18. SHORTLY, WE TAKE NOTE OF FACTS OF THE CASE WHIC H WOULD SUFFICE TO ADJUDICATE THE ISSUE, WHICH THE ASSESSEE WAS SUCCES SFULLY AGITATING FROM THE ASSESSMENT YEAR 2009-10. REPEATED FACT IS THAT ONE SHANTI PROCESSORS LTD. WAS TRANSFERRED AND GOT MERGED WITH ASSESSEE-C OMPANY CONSEQUENT UPON ORDER OF THE HONBLE GUJARAT HIGH COURT. CONS EQUENTLY ALL THE ITA NO.174 AND 315/AHD/2019 - 9 - ASSETS AND LIABILITIES OF AMALGAMATING WERE TRANSFE RRED TO THE AMALGAMATED COMPANY I.E. ASSESSEE-COMPANY. THE AS SESSEE COMPANY HAD TAKEN OVER ALL THE ASSETS, WHICH INCLUDED POWER PLANT STANDING IN THE NAME OF AMALGAMATING COMPANY. AFTER AMALGAMAT ION THE ASSESSEE- COMPANY CLAIMED DEDUCTION UNDER SECTION 80IA IN RES PECT OF POWER PLANT, WHICH ACCORDING TO THE ASSESSEE WAS NEW ONE AND ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA(12), AS WERE APPLICABL E TO THE AMALGAMATING COMPANY FOR THE REMAINING PERIOD. THE LD.AO HOWEVER CONSTRUED THAT PLANT & MACHINERY IN QUESTION WERE O F OLD ONE, AND SINCE THERE WAS NO MATERIAL TO SUGGEST OTHERWISE, THE AMA LGAMATING COMPANY IS NOT ENTITLED FOR SUCH DEDUCTION UNDER SECTION 80 IA. THUS, LD.AO DISALLOWED CLAIM OF THE ASSESSEE UNDER SECTION 80IA AND MADE THE IMPUGNED ADDITION. HOWEVER, IN APPEAL BEFORE THE F IRST APPELLATE AUTHORITY THE CLAIM OF THE ASSESSEE WAS ALLOWED ON THE BASIS OF SIMILAR CLAIM ALLOWED FOR THE EARLIER YEARS. REVENUE IS NO T SATISFIED WITH THE DELETION OF THE ADDITION BY THE LD.CIT(A), HENCE TH EY ARE IN APPEAL BEFORE THE TRIBUNAL. 19. WE HAVE HEARD THE LD.DR WHO SUPPORTED ORDER OF THE AO. WE HAVE ALSO GONE THROUGH THE WRITTEN SUBMISSIONS FILE D BY THE ASSESSEE. IN THE WRITTEN SUBMISSIONS, THE ARGUMENTS OF THE ASSES SEE ARE MORE OR LESS ON SIMILAR LINE AS WERE PLEADED BEFORE THE REVENUE AUTHORITIES. IT FURTHER PLEADED THAT THE ASSESSEE HAS CLAIMED THE I MPUGNED DEDUCTION FROM THE ASSESSMENT YEAR 2009-10, AND UPTO 2014-15 AND SUCH CLAIM WAS ALLOWED EITHER AT THE END OF THE FIRST APPELLATE AU THORITY OR AT THE END OF THE TRIBUNAL. THE SUBMISSIONS OF THE ASSESSEE WERE NOT DISPUTED BY THE LD.DR, HOWEVER, THE REVENUE IS CONSTANTLY CHALL ENGING THIS ISSUE ITA NO.174 AND 315/AHD/2019 - 10 - YEAR AFTER YEAR, DESPITE CLEAR CUT STAND TAKEN BY T HE TRIBUNAL IN FAVOUR OF THE ASSESSEE IN THIS BEHALF. ADMITTEDLY, THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES, AND THEREFORE IT IS NOT APPROPRI ATE FOR US TO REVISIT ELIGIBILITY OF CLAIM MORE SO WHEN, FOR THE AFORESAI D REASONS. ASSESSEE HAS PLACED ON RECORD COPIES OF ORDERS OF THE TRIBUNAL P ASSED IN FAVOUR OF THE ASSESSEE IN THE EARLIER YEARS. ACCORDINGLY, WE REJECT THIS GROUND OF THE REVENUE. 20. GROUND NO.2 AND 3 OF APPEAL RAISE ONE ISSUE, I. E. THE REVENUE IS AGGRIEVED BY ORDER OF THE LD.CIT(A) IN RESTRICTING THE DISALLOWANCE MADE U/S.14A FROM RS.1,09,67,033/- TO RS.18,20,951/-, AN D THEREBY RESTRICTING CALCULATION OF BOOK PROFIT UNDER SECTION 115JB OF TH E ACT. 21. HEARD THE LD.DR AND GONE THROUGH THE RECORD. WE FIND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF SPECIAL BENCH IN THE CASE OF ACIT VS. VIREET INVESTMENTS P. LTD., 165 ITD 27 (SB) WHEREIN IT IS HELD THAT NO INCREASE OR DECREASE CAN BE EFFECTED IN THE BOOK PROFIT CALCULATED UNDER SECTION 115JB ON ACCOUNT OF CERTAIN DISALLOWANCE MADE UNDER SECTION 14A. THE SPECIAL BENCH OF THE I TAT IN THE CASE OF VIREET INVESTMENT P.LTD. (SUPRA) HAS FORMULATED FOL LOWING QUESTION FOR ADJUDICATION ON THIS ISSUE: WHETHER THE EXPENDITURE INCURRED TO EARN EXEMPT IN COME COMPUTED U/S.14A COULD NOT BE ADDED WHILE COMPUTING BOOK PROFIT U/S.115JB OF THE ACT. 22. SPECIAL BENCH ANSWERED THIS QUESTION IN FAVOUR OF THE ASSESSEE AND HELD THAT COMPUTATION FOR THE PURPOSE OF CLAUSE (F) OF EXPLANATION 1 TO SECTION 115JB(2) IS TO BE MADE WITHOUT RESORTING TO THE COMPUTATION AS ITA NO.174 AND 315/AHD/2019 - 11 - CONTEMPLATED UNDER SECTION 14A R.W. RULE 8D. RESPE CTFULLY FOLLOWING THE ABOVE DECISION OF THE SPECIAL BENCH, WE FIND NO MERIT IN THIS GROUND OF APPEAL AND DIRECT THE AO NOT TO MAKE ADJUSTMENTS IN BOOK PROFIT FOR THE PURPOSE OF MAT LIABILITY ON THE BASIS OF CALCUL ATIONS MADE WITH RULE 8D OF THE INCOME TAX RULES. 23. IN THE RESULT, APPEALS OF THE REVENUE AS WELL A S THAT OF ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 25 TH OCTOBER, 2021 SD/- SD/- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) VICE-PRESIDENT AHMEDABAD; DATED, 25/10/2021