Deputy Commissioner of Income Tax Central Circle-2(1), Bangalore V. M/s Tejas Networks Limited , Bangalore

ITA 3191/BANG/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3926 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-10-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 29-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S ANNAMALAI
• Keywords: Depreciation; Revised return; Rule 8D; Set aside
• Section: 14A

Judgement Text

ITA NOS.2848 & 3191/BANG/2018 M/S. TEJAS NETWORKS LIMITED, BANGALORE IN THE INCOME TAX APPELLATE TRIBUNAL ABENCH: BANGALORE BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.2848/BANG/2018 ASSESSMENT YEAR: 2014-15 M/S. TEJAS NETWORKS LIMITED PLOT NO.25, SURVEY NO.13, 14,17, 18, JP SOFTWARE PARK KONNAPANA AGRAHARA VILLAGE BEGUR HOBLI ELECTRONIC CITY PHASE 1 BENGALURU KARNATAKA 560 100 PAN NO :AABCT1670M VS. DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-2(1) BENGALURU APPELLANT RESPONDENT ITA NO.3191/BANG/2018 ASSESSMENT YEAR: 2014-15 DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-2(1) BENGALURU VS. M/S. TEJAS NETWORKS LIMITED BENGALURU KARNATAKA 560 100 APPELLANT RESPONDENT APPELLANT BY : SHRI S. ANNAMALAI, A.R. RESPONDENT BY : MS. NEERA MALHOTRA, D.R. DATE OF HEARING : 06.10.2021 DATE OF PRONOUNCEMENT : 08.10.2021 ITA NOS.2848 & 3191/BANG/2018 M/S. TEJAS NETWORKS LIMITED, BANGALORE PAGE 2 OF 10 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-10, BENGALURU AND THEY RELATE TO THE ASS ESSMENT YEAR 2014-15. 2. THE ASSESSEE IS IN APPEAL IN RESPECT OF THE FOLL OWING ISSUES:- A) NON-GRANTING OF DEDUCTION U/S 35(1)(I) & 35(1)(IV) OF THE INCOME-TAX ACT,1961 ['THE ACT' FOR SHORT]. B) DISALLOWANCE OF PROVISION FOR COMMISSION. C) NON-SETTING OFF OF BROUGHT FORWARD LOSSES AND UNABS ORBED DEPRECIATION. D) NON-GRANTING OF REFUND. 3. THE REVENUE IS IN APPEAL ON THE FOLLOWING ISSUES :- A) DISALLOWANCE U/S 35(2AB) OF THE ACT. B) DISALLOWANCE U/S 14A READ WITH RULE 8D(II) 4. THE ASSESSEE IS ENGAGED IN THE DESIGN, DEVELOP MENT AND MANUFACTURE OF TELECOMMUNICATION EQUIPMENTS. 5. WE SHALL TAKE UP THE APPEAL FILED BY THE ASSESSE E FIRST. THE FIRST ISSUE URGED BY THE ASSESSEE RELATES TO NON-GR ANTING OF DEDUCTION U/S 35(1)(I) & 35(1)(IV) OF THE ACT. THE LD. A.R. SUBMITTED THAT THE ASSESSEE DID NOT CLAIM THE ABOVE SAID DEDU CTIONS IN THE RETURN OF INCOME FILED BY IT. HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED A REVISE D COMPUTATION OF INCOME, A COPY OF WHICH IS PLACED AT PAGE NO.26 OF THE PAPER BOOK, WHEREIN THE ASSESSEE CLAIMED DEDUCTION OF RS.86,61, 509/- U/S ITA NOS.2848 & 3191/BANG/2018 M/S. TEJAS NETWORKS LIMITED, BANGALORE PAGE 3 OF 10 35(1)(I) OF THE ACT AND A SUM OF RS.2,11,84,968/- U /S 35(1)(IV) OF THE ACT. HOWEVER, THE A.O. DID NOT CONSIDER THE ABOVE SAID REVISED COMPUTATION OF INCOME AND ACCORDINGLY DID NOT ALLOW THE DEDUCTIONS CITED ABOVE. BEFORE LD. CIT(A), THE ASS ESSEE RAISED SPECIFIC GROUNDS NAMELY GROUND NO.1.3 & GROUND NO.1 .4 WITH REGARD TO THE ABOVE SAID CLAIMS. HOWEVER, THE LD. CIT(A) ALSO DID NOT ADJUDICATE THEM. ACCORDINGLY, THE LD. A.R. PRA YED THAT THESE ISSUES MAY BE RESTORED TO THE FILE OF A.O. FOR EXAM INING THE CLAIMS OF THE ASSESSEE. 6. THE LD. D.R. SUBMITTED THAT THE ASSESSEE HAS NOT CLAIMED THESE DEDUCTIONS IN ITS ORIGINAL RETURN OF INCOME. AS PER THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE C ASE OF GOETZ INDIA LTD. 284 ITR 323 IT IS NECESSARY FOR AN ASSES SEE TO FILE REVISED RETURN OF INCOME FOR RAISING A NEW CLAIM, WHICH IS NOT RAISED IN THE ORIGINAL RETURN OF INCOME. ACCORDINGLY, THE LD. D. R. SUBMITTED THAT THE CLAIM OF THE ASSESSEE WAS NOT RIGHTLY CONSIDERE D BY THE TAX AUTHORITIES, SINCE THE ASSESSEE HAS NOT FILED ANY R EVISED RETURN OF INCOME. 7. IN THE REJOINDER, THE LD. A.R. PLACED HIS RELIAN CE ON THE DECISION RENDERED BY HONBLE KARNATAKA HIGH COURT I N THE CASE OF PRINCIPAL CIT VS. KARNATAKA STATE CO-OPERATIVE FEDE RATION LTD. (2021) 128 TAXMANN.COM 1, WHEREIN IT WAS HELD THAT THE ASSESSEE CAN MAKE FRESH CLAIM BEFORE APPELLATE AUTHORITIES E VEN HE HAS NOT FILED REVISED RETURN OF INCOME TO MAKE SUCH A CLAIM . 8. WE HEARD THE PARTIES ON THIS ISSUE AND PERUSED T HE RECORD. BEFORE US, THE LD D.R CONTENDED THAT THE ASSESSEE C OULD MAKE FRESH CLAIMS ONLY BY FILING REVISED RETURN OF INCOME BY P LACING RELIANCE ON THE DECISION OF GOETZ INDIA LTD.(284 ITR 323). HOW EVER, THE HONBLE ITA NOS.2848 & 3191/BANG/2018 M/S. TEJAS NETWORKS LIMITED, BANGALORE PAGE 4 OF 10 SUPREME COURT, IN THE ABOVE SAID CASE, HAS SPECIFIC ALLY HELD THAT ITS DECISION WILL NOT IMPINGE UPON THE POWERS OF THE TR IBUNAL TO ADMIT ADDITIONAL CLAIMS. THE HONBLE KARNATAKA HIGH COUR T HAS HELD IN THE CASE OF KARNATAKA STATE CO-OPERATIVE FEDERATION LTD (SUPRA) THAT THE ASSESSEE COULD RAISED FRESH CLAIM BEFORE A PPELLATE AUTHORITIES. IN THE INSTANT CASE, WE NOTICE THAT THE ASSESSEE HAS RAISED CLAIM FOR DEDUCTION OF ABOVE SAID AMOUNTS BE FORE THE A.O. BY FILING A REVISED COMPUTATION OF INCOME AND ALSO BEF ORE LD. CIT(A) BY RAISING SPECIFIC GROUNDS. AS NOTICED EARLIER, BOTH THE TAX AUTHORITIES DID NOT CONSIDER THEM. ACCORDINGLY, WE ARE OF THE VIEW THAT THE CLAIM OF THE ASSESSEE DESERVES ADMISSION. ACCORDIN GLY, WE ADMIT BOTH THE CLAIMS OF THE ASSESSEE AND RESTORE THE SAM E TO THE FILE OF THE A.O. FOR EXAMINING THEM IN ACCORDANCE WITH LAW. 9. THE NEXT ISSUE URGED BY THE ASSESSEE RELATES TO DISALLOWANCE OF PROVISION FOR COMMISSION EXPENSES. THE A.O. NOT ICED THAT THE ASSESSEE HAS CLAIMED A SUM OF RS.56,97,530/- AS COM MISSION AMOUNT PAYABLE TO MR. MD. ZIAUL HASSAN KHAN. THE A .O. HAS OBSERVED THAT THE ASSESSEE HAS NOT FURNISHED THE DE TAILS OF COMPUTATION OF COMMISSION AMOUNT AND ALSO PURPOSE O F PAYMENT. ACCORDINGLY, THE A.O. DISALLOWED PROVISION FOR COMM ISSION EXPENSES OF RS.56,97,530/-. 10. BEFORE LD. CIT(A), THE ASSESSEE FURNISHED COPY OF AGREEMENT ENTERED BY IT WITH MD. ZIAUL HASSAN KHAN WITH REGAR D TO PAYMENT OF COMMISSION. IT WAS SUBMITTED THAT THE PROVISION FOR COMMISSION RELATES TO COMMISSION PAYABLE TO THE ABOVE SAID AGE NT FOR PROCURING SALES ORDERS IN THIS YEAR. THE LD. CIT(A) EXAMINED THE AGREEMENT MORE PARTICULARLY PARAGRAPH 3.3 OF THE AGREEMENT, W HICH READS AS UNDER: ITA NOS.2848 & 3191/BANG/2018 M/S. TEJAS NETWORKS LIMITED, BANGALORE PAGE 5 OF 10 3.3 SUBJECT TO THIS ARTICLE 3, TEJAS SHALL PAY SERV ICE FEE TO THE SERVICE PROVIDER AFTER THE SALES MADE PURSUANT TO T HIS AGREEMENT ARE CLOSED . SERVICE FEE SHALL BECOME DUE TO THE SERVICE PROV IDER WITHIN THIRTY (30) DAYS AFTER TEJAS RECEIVES FOR IM MEDIATE VALUE FROM OR ON BEHALF OF THE CUSTOMER THE PRICE WHERE THE RELEVANT PO PROVIDES FOR PAYMENT OF THE PRICE BY SHALL BECOM E DUE TO THE SERVICE PROVIDER AS SOON AS SUCH INSTALMENTS ARE RE CEIVED FOR IMMEDIATE VALUE BY TEJAS, THAT PROPORTION BEING, EQ UIVALENT TO THE PROPORTION WHICH SUCH INSTALMENTS BEAR TO THE T OTAL PRICE. THE LD. CIT(A), ON A READING OF HIGHLIGHTED PORTION OF PARAGRAPH 3.3 OF THE AGREEMENT, TOOK THE VIEW THAT SERVICE FEE (C OMMISSION) SHALL BECOME DUE TO THE AGENT WITHIN 30 DAYS AFTER THE AS SESSEE RECEIVES PAYMENT FROM ITS CUSTOMERS. THE LD CIT(A) NOTICED THAT, DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS NOT RECE IVED PAYMENT FROM THE CUSTOMERS. ACCORDINGLY, THE LD. CIT(A) TOO K THE VIEW THAT THE COMMISSION AMOUNT HAS NOT BECOME PAYABLE IN THI S YEAR. ACCORDINGLY, HE CONFIRMED THE DISALLOWANCE MADE BY THE A.O. 11. THE LD. A.R. SUBMITTED THAT THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNT AND HENCE THE ASSESSEE IS REQUIRED TO PROVIDE FOR ALL KNOWN EXPENSES. SINCE THE ABOVE SA ID AGENT HAS PROCURED THE ORDERS, THE COMMISSION EXPENSES HAS AC CRUED IN THIS YEAR ITSELF. HE SUBMITTED THAT, AS PER THE AGREEME NT ENTERED BY THE ASSESSEE WITH THE ABOVE SAID AGENT, THE PAYMENT OF COMMISSION IS POSTPONED, I.E., IT SHALL BECOME PAYABLE ONLY AFTER RECEIPT OF PAYMENTS AGAINST SALES, I.E., ONLY PAYMENT OF COMMI SSION AMOUNT IS POSTPONED. ACCORDINGLY, THE LD A.R SUBMITTED THAT THE LD CIT(A) WAS NOT CORRECT IN INTERPRETING THAT THE COMMISSION AMOUNT ITSELF WILL ACCRUE ONLY WHEN THE PAYMENT IS RECEIVED BY TH E ASSESSEE. THE LD. A.R. PLACED HIS RELIANCE ON THE DECISION RE NDERED BY HONBLE A.P. HIGH COURT IN THE CASE OF CIT(A) VS. KCP LTD. (2018) 94 TAXMAN.COM 46, WHEREIN IT WAS HELD THAT THE MERE PO STPONEMENT OF THE PAYMENT OF COMMISSION WILL NOT DISENTITLE THE A SSESSEE FROM ITA NOS.2848 & 3191/BANG/2018 M/S. TEJAS NETWORKS LIMITED, BANGALORE PAGE 6 OF 10 CLAIMING THE DEDUCTION WHEN IT ACCRUED. IT WAS FUR THER HELD THAT THE LIABILITY TO PAY COMMISSION ACCRUED WHEN ORDERS WERE SECURED BY AGENTS AND NOT WHEN SUPPLIES WERE EFFECTED BY TH E ASSESSEE. 12. THE LD. D.R., ON THE CONTRARY, SUBMITTED THAT T HE TERMS OF AGREEMENT ENTERED BY THE ASSESSEE WITH MD. ZIAUL HA SSAN KHAN CLEARLY SHOWS THAT THE COMMISSION SHALL BECOME DUE ONLY AFTER RECEIPT OF MONEY FROM THE CUSTOMERS. ACCORDINGLY, SHE SUBMITTED THAT THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF COMMISSION PAYMENTS. 13. WE HEARD THE PARTIES ON THIS ISSUE AND PERUSED THE RECORD. A CAREFUL PERUSAL OF FIRST LINE OF CLAUSE NO.3.3 OF T HE AGREEMENT ENTERED BY THE ASSESSEE WITH MD. ZIAUL HASSAN KHAN, WHICH IS EXTRACTED ABOVE, WOULD SHOW THAT THE ASSESSEE SHALL PAY SERVICE FEE (COMMISSION) TO THE AGENT AFTER THE SALES MADE PURSUANT TO THIS AGREEMENT ARE CLOSED, I.E., THE COMMISSION SHALL ACCRUE AFTER THE SALES IS FINALIZED. HOWEVER, THE SAME SHALL BECOME DUE FOR PAYMENT ONLY AFTER RECEIPT OF MONEY FROM THE CUSTOMER. ON A READING OF WHOLE OF CLAUSE 3.3 OF THE AGREEMENT, WE ARE OF THE VIEW THAT THE COMMISSION EXPENDITURE SHALL ACCRUE AS AND WHEN THE SALES IS FINALIZED. HENCE, WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN TAKING THE VIEW THAT THE COMMISSION EX PENDITURE SHALL BECOME DUE ONLY WHEN THE PAYMENT IS RECEIVED FROM T HE CUSTOMERS. IN THE CASE OF KCP LTD. (SUPRA), THE HONBLE A.P. H IGH COURT HAS UPHELD THE VIEW OF THE TRIBUNAL IN HOLDING THAT THE LIABILITY TO PAY COMMISSION ACCRUES WHEN ORDERS WERE SECURED BY AGEN TS AND NOT WHEN SUPPLIES WERE EFFECTED BY THE ASSESSEE. 14. THERE IS ONE MORE ANGLE WITH REGARD TO THE C LAIM OF THE ASSESSEE. UNDER REVENUE COST MATCHING PRINCIPLE, ALL EXPENSES ITA NOS.2848 & 3191/BANG/2018 M/S. TEJAS NETWORKS LIMITED, BANGALORE PAGE 7 OF 10 INCURRED IN GENERATING THE REVENUE SHOULD BE PROVID ED FOR IN THE BOOKS OF ACCOUNT AND ALSO UNDER THE PRINCIPLE PRUD ENCE, ALL KNOWN LIABILITIES HAVE TO BE PROVIDED FOR IN THE BO OKS OF ACCOUNT. IN THE INSTANT CASE, THE ASSESSEE IS AWARE THAT IT WOU LD BE LIABLE TO PAY COMMISSION AMOUNT TO MD. ZIAUL HASSAN KHAN WHEN THE SALES IS FINALIZED AND THIS COMMISSION EXPENDITURE IS RELATE D TO THE REVENUE GENERATED DURING THE YEAR UNDER CONSIDER. HENCE IT IS ALSO A KNOWN LIABILITY FOR THIS YEAR. HENCE, AS PER ACCOUNTING PRINCIPLES DISCUSSED ABOVE, THE SAID COMMISSION EXPENDITURE SH OULD BE PROVIDED FOR IN THE BOOKS OF ACCOUNTS WHEN THE RELE VANT SALES ARE ACCOUNTED. ON THIS COUNT ALSO, THE CLAIM OF THE AS SESSEE IS ADMISSIBLE. ACCORDINGLY, WE ARE OF THE VIEW THAT THE COMMISSION EXPENDITURE CLAIMED BY THE ASSESSEE IS ALLOWABLE IN THE YEAR UNDER CONSIDERATION. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD. CIT(A) ON THIS ISSUE AND DIRECT THE A.O. TO ALLOW T HE COMMISSION EXPENDITURE CLAIMED BY THE ASSESSEE. 15. THE ASSESSEE HAS RAISED AN ALTERNATIVE GROUND T HAT IF THE COMMISSION EXPENDITURE IS NOT ALLOWED IN THIS YEAR, THEN A.O. SHOULD BE DIRECTED TO ALLOW IT IN THE YEAR OF PAYME NT. IN VIEW OF THE DECISION RENDERED BY US IN THE PRECEDING PARAGRAPH, THIS ADDITIONAL GROUND SHALL BECOME INFRUCTUOUS. 16. THE OTHER ISSUES URGED BY THE ASSESSEE RELATED TO NON SETTING OFF OF BROUGHT FORWARD LOSSES AND UNABSORBED DEPREC IATION AND ALSO NON-GRANTING OF REFUND. BOTH THE ISSUES REQUIRE VE RIFICATION AT THE END OF THE A.O. ACCORDINGLY, WE RESTORE THIS ISSUE TO HIS FILE FOR EXAMINING THE CLAIM OF THE ASSESSEE. ITA NOS.2848 & 3191/BANG/2018 M/S. TEJAS NETWORKS LIMITED, BANGALORE PAGE 8 OF 10 17. WE SHALL NOW TAKE UP THE APPEAL FILED BY THE RE VENUE. THE FIRST ISSUE RELATES TO DISALLOWANCE OF DEDUCTION CL AIMED U/S 35(2AB) OF THE ACT. 18. THE ASSESSEE CLAIMED A SUM OF RS.103,88,54,734/ - AS DEDUCTION U/S 35(2AB) OF THE ACT @ 200% OF THE EXPE NDITURE OF RS.51,94,27,366/- INCURRED ON RESEARCH AND DEVELOPM ENT. THE A.O. NOTICED THAT THE R & D EXPENDITURE IS RELATED TO PRODUCT DEVELOPMENT EXPENDITURE. HE FURTHER NOTICED THAT THE FORM NO.3CL ISSUED BY DSIR MENTIONED A SUM OF RS.102,15, 31,716/-. ACCORDINGLY, THE EXCESS AMOUNT OF RS.1,73,23,016/- WAS DISALLOWED BY THE A.O. 19. IN ADDITION TO THE ABOVE, THE A.O. TOOK THE VI EW THAT THE PRODUCT DEVELOPMENT EXPENDITURE WOULD NOT FALL UN DER THE CATEGORY OF RESEARCH & DEVELOPMENT EXPENSES ELIGIBL E FOR WEIGHTED DEDUCTION U/S 35(2AB) OF THE ACT, EVEN THOUGH THE E XPENDITURE HAS BEEN CERTIFIED BY DSIR IN FORM 3CL A R & D EXPENDIT URE. ACCORDINGLY HE TOOK THE VIEW THAT THE WEIGHTED DEDU CTION AMOUNT IN RESPECT OF PRODUCT DEVELOPMENT EXPENDITURE IS NOT ALLOWABLE. IT IS PERTINENT TO NOTE THAT THE AO HAD MADE IDENTICAL DI SALLOWANCE IN AN EARLIER YEAR AND WHEN THE MATTER REACHED HONBLE KA RNATAKA HIGH COURT, IT HAS EXPRESSED THE VIEW THAT THE A.O. HAS NO JURISDICTION TO SIT IN THE JUDGEMENT OVER THE REPORT SUBMITTED BY D SIR IN FORM NO.3CL. THE APPEAL FILED BY THE REVENUE BEFORE HON BLE SUPREME COURT AGAINST THE DECISION RENDERED BY HONBLE HIGH COURT HAS ALSO BEEN DISMISSED. IN THE INSTANT YEAR, THE AO HAS NO TED THE JUDICIAL RULING REFERRED ABOVE. HOWEVER, THE A.O. CHOSE TO DISALLOW WEIGHTED DEDUCTION AMOUNT OF RS.51,94,27,366/-(50% OF RS.103 ,88,54,734/) IN ORDER TO MAINTAIN CONSISTENCY. ITA NOS.2848 & 3191/BANG/2018 M/S. TEJAS NETWORKS LIMITED, BANGALORE PAGE 9 OF 10 20. THE LD. CIT(A), DELETED THE DISALLOWANCE OF RS. 51,94,27,366/- BY FOLLOWING THE DECISION RENDERED BY HONBLE HIGH COURT OF KARNATAKA IN THE ASSESSEES OWN CASE IN WRIT PETITI ON NO.7004/2014. THE REVENUE IS AGGRIEVED BY THE DECI SION OF LD. CIT(A). 21. WE HEARD THE PARTIES ON THIS ISSUE AND PERUSED THE RECORD. THE DECISION RENDERED BY HONBLE JURISDICTIONAL HIG H COURT IS BINDING ON ALL AUTHORITIES BELOW IT. SINCE THE LD. CIT(A) HAS FOLLOWED THE DECISION RENDERED BY JURISDICTIONAL HI GH COURT, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE DECISION RENDERED BY LD. CIT(A) ON THIS ISSUE. ACCORDINGLY, WE CONFIRM HIS ORDER PASSED ON THIS ISSUE. 22. THE NEXT ISSUE URGED BY THE REVENUE RELATES TO DISALLOWANCE MADE U/S 14A OF THE ACT. THE ASSESSEE HAD DISALLOW ED A SUM OF RS.3,96,417/- BY APPLYING RULE 8D(2)(III) OF THE I. T. RULES. THE A.O. TOOK THE VIEW THAT THE ASSESSEE SHOULD HAVE DISALLO WED PART OF INTEREST EXPENDITURE BY APPLYING RULE 8D(2)(II). A CCORDINGLY, DISALLOWED A SUM OF RS.34,798/- OUT OF INTEREST EX PENSES UNDER RULE 8D((2)(II). THE LD. CIT(A) DELETED THE SAME B Y OBSERVING THAT THE A.O. HAS NOT GIVEN SUITABLE REASON FOR MAKING T HIS ADDITION. 23. WE HEARD THE PARTIES AND PERUSED THE RECORD. A PERUSAL OF BALANCE SHEET FURNISHED BY THE ASSESSEE WOULD SHOW THAT THE ASSESSEE IS HAVING OWN FUNDS OF RS.334.12 CRORES WH ILE THE INVESTMENTS MADE BY THE ASSESSEE STAND AT RS.4.58 C RORES ONLY. ADMITTEDLY, THE OWN FUNDS AVAILABLE WITH THE ASSESS EE IS IN FAR EXCESS OF THE INVESTMENTS MADE BY THE ASSESSEE. AC CORDINGLY, AS PER DECISION RENDERED BY HONBLE KARNATAKA HIGH COU RT IN THE CASE OF MICRO LABS LTD. 383 ITR 490, NO DISALLOWANCE OUT OF INTEREST ITA NOS.2848 & 3191/BANG/2018 M/S. TEJAS NETWORKS LIMITED, BANGALORE PAGE 10 OF 10 EXPENDITURE IS CALLED FOR. ACCORDINGLY, WE CONFIRM THE DECISION RENDERED BY LD. CIT(A) IN DELETING THIS DISALLOWANC E FOR THE REASONS STATED ABOVE. 24. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH OCT, 2021 SD/- (BEENA PILLAI) JUDICIAL MEMBER SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 8 TH OCT, 2021. VG/SPS COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.