Mr. Rajinder Kumar, New Delhi V. JCIT, New Delhi

ITA 3858/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65234 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 03-05-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 13-08-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V K SURYAVANSHI
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `F : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI A.N. PAHUJA, ACCOUNTANT MEMBER ITA NO.3858/DEL./2010 (ASSESSMENT YEAR : 2007-08) MR. RAJINDER KUMAR, VS. JCIT, RANGE 37, RAJINDER KUMAR ASSOCIATES, NEW DELHI B-5/116, SAFDARJUNG ENCLAVE, NEW DELHI-110029. (PAN/GIR NO.AAAPK6973M) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SALIL AGGARWAL, ADV./SHAILESH GU PTA, CA REVENUE BY : SHRI V.K. SURYAVANSHI, SR.DR ORDER PER U.B.S. BEDI, J.M. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT (A)- XXVIII, NEW DELHI, DATED 31.03.2010, RELEVANT TO AS SESSMENT YEAR 2007-08, WHEREIN BESIDES CHALLENGING ACTION OF CIT(A) IN UPHOLDING THE ADDITION OF RS.76,51,800/- MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE I.T. ACT, 1961, ASSESSEE HAS ALSO CHALLENGED UPHOLDING THE AD DITION OF RS.4,90,995/- U/S 14A OF THE ACT. 2. AS REGARDS FIRST ISSUE, ASSESSEE SUBMITTED BEFOR E THE ASSESSING OFFICER THAT THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING, AN D INCOME FOR THE YEAR HAS BEEN DETERMINED BASED ON THE SAID SYSTEM OF ACCOUNTING R EGULARLY EMPLOYED BY THE ASSESSEE. IN TERMS OF THE SAID SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE, TAX AT SOURCE ON A.Y. 3858/DEL./2010 (A.Y. 2007-08) 2 PROFESSIONAL FEE PAID IS DEDUCTIBLE AND IS BEING DE DUCTED WHEN PAYMENT IS MADE TO THE PAYEES. DURING THE MONTH OF FEBRUARY, 2007, ASSESS EE RELEASED PAYMENT TO THE EXTENT OF RS.69,92,000/- AND ACCORDINGLY TDS AMOUNTING TO RS. 3,92,231/-, WAS PAID IN MARCH, 2007. PROFESSIONAL FEE THOUGH RELATED TO FEBRUARY, 2007 WAS RELEASED IN MARCH, 2007, ACCORDINGLY TAX WAS DEDUCTED IN MARCH, 2007 AND PAI D IN APRIL, 2007. 2. THE ASSESSEE IS MAINTAINING MEMORANDA RECORDS IN THE ACCOUNTS TO WORK OUT ITS LIABILITY AT ANY POINT OF TIME, BUT THE SAID LIABIL ITY HAS NO IMPACT ON INCOME OF THE ASSESSEE AS PROFIT AND LOSS ACCOUNT IS DRAWN BASED ON ACTUAL OUTGOING/INCOMING OF EXPENSE/INCOME. IGNORING THE METHOD OF ACCOUNTING EMPLOYED BY THE ASSESSEE, ASSESSING OFFICER BASED ON THE MEMORANDA RECORDS IN THE ACCOUNTS, HAS DETERMINED RS.78,51,800/- BEING PROFESSIONAL FEE ON WHICH TAX WAS NOT PAID UP TO 31 ST MARCH, 2007 AS SUCH DISALLOWED THE SAID SUM U/S 40(A)(IA) OF TH E I.T. ACT, 1961. 3. THE ASSESSEE TOOK UP THE MATTER IN APPEAL WITH R ESPECT TO DISALLOWANCE OF PROFESSIONAL FEE OF RS.78,51,800/- BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. IT WAS SUBMITTED TO DELETE THE ADDITION MADE AS THERE HAS BEEN NO SHORTFALL IN DEDUCTION OF TAX AND TAX HAS BEEN DULY DEDUCTED AND PAID TO THE AUTHORITY WITHIN THE SPECIFIED TIME. THEREFORE, ADDITION MADE BY THE AS SESSING OFFICER NEEDS TO BE DELETED, WHICH MAY BE DELETED. 4. LD.CIT(A) WHILE CONSIDERING, BUT NOT ACCEPTING THE PLEA OF THE ASSESSEE HAS CONCLUDED TO UPHOLD THE ACTION OF THE ASSESSING OFF ICER. 5. STILL AGGRIEVED, ASSESSEE HAS COME UP IN FURTHER APPEAL AND IT WAS STRONGLY PLEADED THAT ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTIN G AND AN EXPENSE IS ALLOWED WHEN IT IS ACTUALLY PAID, AND THAT IN CASH SYSTEM OF ACCOUNTI NG, THERE CANNOT BE AN ACCRUAL OF AN A.Y. 3858/DEL./2010 (A.Y. 2007-08) 3 EXPENSE AS SUCH NO TAX IS DEDUCTIBLE THOUGH THE AMO UNT IS SHOWN PAYABLE IN THE MEMORANDA RECORDS INCORPORATED IN THE REGULAR BOOKS OF ACCOUNT. IN THIS CASE ASSESSEE HAS ACTUALLY DEBITED THE PROFESSIONAL FEE ACCOUNT A ND CLAIMED EXPENSE THEREOF IN THE P&L ACCOUNT. THE CORRESPONDING CREDIT HAS ALSO BEEN MA DE IN THE TDS ACCOUNT. THE ASSESSEE HAS ADMITTED THAT IN THE MONTH OF FEBRUARY, 2007, A SUM OF RS.8,33,064/- WAS CREDITED TO TDS ACCOUNT WHICH RELATES TO PROFESSIONAL CHARGES A MOUNTING TO RS.14849500/- OUT OF WHICH TDS DUE TO THE EXTENT OF RS.392221 WAS PAID O N 07.03.2007 AND BALANCE CORRESPONDING TO PROFESSIONAL CHARGES AMOUNTING TO RS.78,51,800 WAS PAID ONLY SUBSEQUENT TO 31 ST MARCH, 2007 I.E. IN THE MONTH OF APRIL, 2007 AND SINCE THE AMOUNT HAS BEEN PAID WITHIN DUE DATE FOR FILING OF RETURN U/S 139(1), THEREFORE ADDITION AS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) IS NOT TENABLE WHICH SHOULD BE DELETED. 6. LD.COUNSEL FOR THE ASSESSEE ALSO RELIED UPON THE CALCUTTA HIGH COURT IN I.T.A. NO.302 OF 2011 GA 3200/2011 DECIDED ON 23.11.2011 W HICH IS EXACTLY ON THE SAME ISSUE WHICH HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AN D IN THIS CASE DECISION OF EARLIER DECISION OF ITAT, SPECIAL BENCH, ON IDENTICAL ISSUE IN VIRGIN CREATION VS. ITO, IN WHICH IT HAS BEEN CLEARLY HELD THAT AMENDMENTS TO SECTION 40(A)(IA) THOUGH MADE IN FINANCE ACT, 2010 HAS TO BE HELD TO BE EFFECTIVE FROM 1.4.2005. SINCE ONE OF THE HIGH COURTS HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND SO FAR NO CONTRARY DECISION IS THERE ON THIS ISSUE, THEREFORE, BEING A SOLE DECISION OF THE HIG H COURT OTHER THAN THE JURISDICTION HIGH COURT IS REQUIRED TO BE FOLLOWED, WHICH MAY BE FOLL OWED. 7. LD.DR HAS BEEN HEARD ON THIS ISSUE, WHO HAS RELI ED UPON THE ORDERS OF ASSESSING OFFICER AS WELL AS OF CIT(A) TO PLEAD FOR CONFIRMAT ION OF THE IMPUGNED ORDERS. A.Y. 3858/DEL./2010 (A.Y. 2007-08) 4 8. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MAT ERIAL ON RECORD AS WELL AS PRECEDENT RELIED UPON BY THE LD.COUNSEL FOR THE ASS ESSEE AND FIND THAT THE ASSESSEE HAS DEBITED IN THE MONTH OF FEBRUARY, 2007 A SUM OF RS. 8,33,064/- HAVING BEEN CREDITED TO TDS ACCOUNT WHICH RELATES TO PROFESSIONAL CHARGES A MOUNTING TO RS.1,48,49,500/-, OUT OF WHICH TDS DUE TO THE EXTENT OF RS.3,92,221/- WAS PA ID ON 07.03.2007 WHEREAS BALANCE CORRESPONDING PROFESSIONAL CHARGES AMOUNTING TO RS. 78,51,800/- WAS PAID ONLY SUBSEQUENT TO 31.3.2007 I.E. IN THE MONTH OF APRIL, 2007 AND IT IS THE MAIN CONTENTION OF THE ASSESSEE THAT SINCE THE AMOUNT HAS BEEN PAID WI THIN THE DUE DATE FOR FILING OF RETURN U/S 139(1) OF THE I.T. ACT, 1961, THEREFORE, ADDITI ON AS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) IS NOT CALLED FOR WHICH NEE DS DELETION AND RELIANCE HAS BEEN PLEADED ON CALCUTTA HIGH COURT DECISION, WHICH HAS BEEN FOLLOWED BY ITAT, MUMBAI BENCH C IN THE CASE OF PIYUSH C. MEHTA AND REPROD UCED IN PARAS.16,17, 18 & 19 TO DELETE SIMILAR TYPE OF ADDITION WHICH READ AS UNDER : 16. AS AGAINST THE AFORESAID DECISION THE REVENUE PREFERRED APPEAL BEFORE THE HONBLE CALCUTTA HIGH COURT. THE HONBLE CALCUTTA HIGH COURT IN I.T.A. NO.302 OF 2011 GA 3200/2011 DECIDED ON 23.11.2011, HELD AS FOLLOWS: WE HAVE HEARD MR. NIZAMUDDIN AND GONE THROUGH THE IMPUGNED JUDGMENT AND ORDER. WE HAVE ALSO EXAMINED THE POIN T FORMULATED FOR WHICH THE PRESENT APPEALS IS SOUGHT TO BE ADMITTED. IT IS ARGUED BY MR. NIZAMUDDIN THAT THIS COURT NEEDS TO TAKE DECISION A S TO WHETHER SECTION 40A(IA) IS HAVING RETROSPECTIVE OPERATION OR NOT. THE LD.DR TRIBUNAL ON FACT FOUND THAT THE ASSESSEE HAD DEDUCTED TAX AT SOURCE FROM THE PAID CHARGES BETWEEN THE PERIOD APR IL 1, 2005 AND APRIL 28,2006 AND THE SAME WERE PAID BY THE ASSESSEE IN J ULY AND AUGUST, 2006 I.E. WELL BEFORE THE DUE DATE OF FILING OF THE RETU RN OF INCOME FOR YHE YEAR UNDER CONSIDERATION. THIS FACTUAL POSITION WAS UND ISPUTED. MOREOVER, THE SUPREME COURT, AS HAS BEEN RECORDED BY THE LEARNED TRIBUNAL, IN THE CASE OF ALLIED MOTORS PVT. LTD. AND ALSO IN THE CASE OF ALOM EXTRUSIONS LTD., HAS ALREADY DECIDED THAT THE AFORESAID PROVISION HA S RETROSPECTIVE APPLICATION. AGAIN, IN THE CASE REPORTED IN 82 ITR 570, THE SUPREME COURT A.Y. 3858/DEL./2010 (A.Y. 2007-08) 5 HELD THAT THE PROVISION, WHICH HAS INSERTED THE REM EDY TO MAKE THE PROVISION WORKABLE, REQUIRES TO BE TREATED WITH RET ROSPECTIVE OPERATION SO THAT REASONABLE DEDUCTION CAN BE GIVEN TO THE SECTI ON AS WELL. IN VIEW OF THE AUTHORITATIVE PRONOUNCEMENT OF THE SUPREME COUR T, THIS COURT CANNOT DECIDE OTHERWISE. HENCE, WE DISMISS THE APPEAL WIT HOUT ANY ORDER AS TO COSTS. 17. IT CAN BE SEEN FROM THE ABOVE DECISION OF THE H ONBLE CALCUTTA HIGH COURT THAT AMENDMENT TO THE PROVISIONS OF SECTION 40(A)(I A) OF THE ACT, BY THE FINANCE ACT, 2010 AS AFORESAID WAS HELD TO BE RETROSPECTIVE FROM 1.4.2005. IF THE AMENDMENT IS CONSIDERED AS RETROSPECTIVE FORM 1.4.2 005, THE EFFECT WILL BE THAT PAYMENTS OF TDS TO THE CREDIT OF THE GOVERNMENT ON OR BEFORE THE LAST DATE FOR FILING RETURN OF INCOME U/S 139(1) OF THE ACT FOR T HE RELEVANT ASSESSMENT YEAR HAS TO BE ALLOWED AS DEDUCTION. ADMITTEDLY IN THE CASE OF THE ASSESSEE PAYMENTS WERE SO MADE BEFORE THE SAID DUE DATE AND IN TERMS OF TH E DECISION OF THE HONBLE CALCUTTA HIGH COURT NO DISALLOWANCE COULD BE MADE B Y THE ASSESSING OFFICER U/S 40(A)(IA) OF THE ACT. 18. THE QUESTION NOW IS AS TO WHETHER TO FOLLOW THE DECISION OF THE HONBLE SPECIAL BENCH WHICH HAS TAKEN THE VIEW THAT AMENDME NT BY THE FINANCE ACT, 2010 TO THE PROVISIONS OF SEC.40(A)(IA) OF THE ACT IS PR OSPECTIVE AND NOT RETROSPECTIVE FROM 1.4.2005 OR THE DECISION OF THE HONBLE CALCUT TA HIGH COURT TAKING A CONTRARY VIEW. ON THE ABOVE QUESTION, THE LEARNED COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THE DECISION OF THE ITAT DELH I IN THE CASE OF TEJ INTERNATIONAL (P) LTD. VS. DCIT (2000) 69 TTJ (DEL. )650, WHEREIN IT WAS HELD THAT IN THE HIERARCHICAL JUDICIAL SYSTEM THAT WE HAVE IN INDIA, THE WISDOM OF THE COURT BELOW HAS TO YIELD TO THE HIGHER WISDOM OF THE COUR T ABOVE, AND THEREFORE, ONCE AN AUTHORITY HIGHER THAN THIS TRIBUNAL HAS EXPRESSE D ITS ESTEEMED VIEWS ON A AN ISSUE, NORMALLY, THE DECISION OF THE HIGHER JUDICIA L AUTHORITY IS TO BE FOLLOWED. THE BENCH HAS FURTHER HELD THAT THE FACT THAT THE J UDGMENT OF THE HIGHER JUDICIAL FORUM IS FROM A NON-JURISDICTIONAL HIGH COURT DOES NOT REALLY ALTER THIS POSITION, AS LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN TH E CASE OF CIT VS. GODAVARIDEVI SARAF 113 ITR 589(BOM.). 19. IN VIEW OF THE ABOVE, WE HOLD FOLLOWING THE DEC ISION OF THE HONBLE CALCUTTA HIGH COURT THAT AMENDMENT TO THE PROVISION S OF SECTION 40(A)(IA) OF THE ACT, BY THE FINANCE ACT, 2010 IS RETROSPECTIVE FROM 1.4.2005. CONSEQUENTLY, ANY PAYMENT OF TAX DEDUCTED AT SOURCE DURING THE PREVIO US YEARS RELEVANT TO AND FROM ASSESSMENT YEAR 2005-06 CAN BE MADE TO THE GOVERNME NT ON OR BEFORE THE DUE DATE FOR FILING RETURN OF INCOME U/S 139(1) OF THE ACT. IF PAYMENTS ARE MADE AS AFORESAID, THEN NO DEDUCTION U/S 40(A)(IA) OF THE A CT CAN BE MADE. ADMITTEDLY, IN THE PRESENT CASE THE ASSESSEE HAD DEPOSITED THE TAX DEDUCTED AT SOURCE ON OR BEFORE THE DUE DATE FOR FILING RETURN OF INCOME U/S 139(1) OF THE ACT AND THEREFORE THE IMPUGNED DISALLOWANCE DESERVES TO BE DELETED. WE O RDER ACCORDINGLY AND ALLOW THE APPEAL BY THE ASSESSEE. A.Y. 3858/DEL./2010 (A.Y. 2007-08) 6 SINCE, THERE IS NO CHANGE OF FACTS AND ISSUE IS IDE NTICAL AND DIRECT AUTHORITY ON THE POINT IS OF CALCUTTA HIGH COURT, WHEN THERE IS NO OTHER HIGH COURT DECISION ON THE POINT, THEREFORE, FOLLOWING SAID DECISION, WE DIRECT TO DE LETE THE IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) WHILE ACCEPTING THIS GROUND OF APPEAL OF THE ASSESSEE. 9. AS REGARDS SECOND ISSUE WHICH RELATES TO ADDITIO N OF RS.4,90,995/- U/S 14A OF THE I.T. ACT, 1961, FACTS RELATING TO THIS ISSUE INDICA TE THAT ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS STATED THAT ASSESSEE INCURRED EXPENSES ON SALARY AND GENERAL CHARGES DURING THE YEAR UNDER CONSIDERATION AND IN VIEW OF HEAVY INVESTMENT HE WAS NOT SATISFIED WITH THE CLAIM OF THE ASSESSEE THAT NO EXPENDITURE HAS BEEN INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF TOTAL INCOME, AS SUCH D ISALLOWED THE SAME TO MAKE THE THE IMPUGNED ADDITION OF RS.4,90,995/- AS PER RULE 8D R EAD WITH SECTION 14A OF THE I.T. ACT, 1961. 10. IN FIRST APPEAL, ASSESSEE CONTENDED THAT DISALL OWANCE MADE BY THE ASSESSING OFFICER U/S 14A OF THE ACT IS BASED ON ERRONEOUS RE ASONING AND SAME SHOULD BE ALLOWED. 11. CIT(A) WHILE DISCUSSING THE ISSUE IN DETAIL FRO M PARAS 4.2 TO 4.8 HAS CONCLUDED TO CONFIRM SUCH DISALLOWANCE AS PER PARA 4.9 OF HIS OR DER WHICH READS AS UNDER: THE APPELLANTS ARGUMENT THAT RULE 8D CANNOT BE AP PLIED FOR THE YEAR UNDER CONSIDERATION IS NOT ACCEPTABLE IN VIEW OF THE DECI SION OF THE HONBLE ITAT, SPECIAL BENCH IN ITO VS. DAGGA CAPITAL MANAGEMENT ( P) LTD. (2009) 117 ITD 169 (MUM.)(SB) AND BEAUTEX (INDIA) (P) LTD. VS. ITO (2009) 34 SOT 465 (DEL.). 12. STILL AGGRIEVED, ASSESSEE HAS COME UP IN FURTHE R APPEAL AND IT IS THE MAIN CONTENTION OF THE LD.AR OF THE ASSESSEE THAT SINCE DISALLOWANCE PERTAINS TO ASSESSMENT YEAR 2007-08, SO RULE 8D WHICH IS APPLICABLE FROM A SSESSMENT YEAR 2008-09, CANNOT BE APPLIED AND WHILE RELYING UPON GODREJ & BOYACE MFG. CO. LTD. VS DCIT, 328 I.T.R. 81 A.Y. 3858/DEL./2010 (A.Y. 2007-08) 7 (BOM.) AND ITAT, AHMEDABAD BENCH DECISION IN SUGAR DRUGS & PHARMACEUTICAL P. LTD. VS. ADDL.CIT DATED 03.06.2011, IT WAS PLEADED FOR D ELETION OF THE IMPUGNED DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) WHEREAS LD.DR HAS RELIED UPON THE ORDER OF CIT(A) TO PLEAD FOR ITS CONFIRMAT ION. 13. AFTER HEARING BOTH THE SIDES AND CONSIDERING TH E MATERIAL ON RECORD AS WELL AS PRECEDENT RELIED UPON BY THE LD.COUNSEL FOR THE ASS ESSEE WE FIND THAT ISSUE IN RELATION TO DISALLOWANCE U/S 14A HAS BEEN CONSIDERED AND DECIDE D BY THE DELHI HIGH COURT IN THE CASE OF MAXOPP INVESTMENT LTD. VS. CIT, 247 CTR 162 (DEL.), IN WHICH DECISION OF ITAT, SPECIAL BENCH, IN THE CASE OF ITO VS. DAGGA M ANAGEMENT PVT. LTD., 117 ITD 169 (SB), HAS BEEN CONSIDERED, TO CONCLUDE AS UNDER: SECTION 14A OF THE INCOME TAX ACT, 1961, READ WI TH RULE 8D OF THE INCOME TAX RULES, 1962 EXPENDITURE INCURRED IN RE LATION TO INCOME NOT INCLUDIBLE IN TOTAL INCOME WHETHER IN TERMS OF S ECTION 14A(2) CONDITION PRECEDENT FOR ASSESSING OFFICER TO DETERMINE AMOUN T OF EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME IS THAT HE MU ST RECORD HIS DISSATISFACTION WITH CORRECTNESS OF CLAIM OF EXPEND ITURE MADE BY ASSESSEE OR WITH CORRECTNESS OF CLAIM MADE BY ASSESSEE NO E XPENDITURE HAS BEEN INCURRED. HELD, YES WHETHER THEREFORE, DETERMIN ATION OF AMOUNT OF EXPENDITURE IN RELATION TO EXEMPT INCOME UNDER RUL E 8D WOULD ONLY COME INTO PLAY WHEN ASSESSING OFFICER REJECTS CLAIM OF ASSESSEE IN THIS REGARD HELD, YES WHETHER RULE 8D, WHICH WAS INTRODUCED BY VIRTUE OF NOTIFICATION NO. 45/2008, DATED 24.3.2008, IS PROSP ECTIVE IN OPERATION AND CANNOT BE REGARDED AS BEING RETROSPECTIVE HELD, Y ES WHETHER THOUGH SUB-SECTIONS(2) AND (3) OF SECTION 14A WERE INTRODU CED WITH PROSPECTIVE EFFECT FORM ASSESSMENT YEAR 2007-08 ONWARDS, THEY W OULD BE WORKABLE ONLY WITH EFFECT FROM DATE OF INTRODUCTION OF RULE 8D WHICH GAVE CONTENT TO EXPRESSION SUCH METHOD AS MAY BE PRESCRIBED APPEA RING IN SECTION 14A(2) HELD, YES WHETHER, HOWEVER, FACT THAT SU B-SECTIONS (2) AND (3) OF SECTION 14A AND RULE 8D WOULD OPERATE PROSPECT IVELY (AND, NOT RETROSPECTIVELY) DOES NOT MEAN THAT PRIOR TO THAT P ERIOD ASSESSING OFFICER IS NOT TO SATISFY HIMSELF WITH CORRECTNESS OF CLAIM OF ASSESSEE WITH REGARD TO SUCH EXPENDITURE HELD, YES WHETHER EVEN FOR PER-RULE 8D PERIOD, WHENEVER ISSUE OF SECTION 14A ARISES BEFORE AN ASSE SSING OFFICER, HE HAS, FIRST OF ALL, TO ASCERTAIN CORRECTNESS OF CLAIM OF ASSESSEE IN RESPECT OF EXPENDITURE INCURRED IN RELATION TO INCOME WHICH DO ES NOT FORM PART OF TOTAL INCOME UNDER ACT AND IF HE IS SATISFIED ON AN OBJECTIVE ANALYSIS AND A.Y. 3858/DEL./2010 (A.Y. 2007-08) 8 FOR COGENT REASON THAT AMOUNT OF SUCH EXPENDITURE AS CLAIMED BY ASSESSEE IS NOT CORRECT, HE REQUIRED TO DETERMINE AMOUNT OF SUCH EXPENDITURE ON BASIS OF A REASONABLE AND ACCEPTABLE METHOD OF APPO RTIONMENT - HELD, YES (PARTLY IN FAVOR OF REVENUE). 14. SINCE APPROPRIATE MATERIAL HAS NEITHER BEEN PLA CED ON RECORD NOR CONSIDERED BY THE AUTHORITIES BELOW, THEREFORE, FOLLOWING THE DEL HI HIGH COURT DECISION IN THE CASE CITED SUPRA, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW ON THIS ISSUE AND REFER THE MATTER BACK TO THE ASSESSING OFFICER FOR DECIDING IT AFRESH IN THE LIGHT OF THE SAID DECISION AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. 15. AS A RESULT, THE APPEAL FILED BY THE ASSESSEE G ETS ACCEPTED BUT PARTLY FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 01.08.2012. SD/- SD/- (A.N. PAHUJA) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : 01.08.2012 SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XXVIII, NEW DELHI. 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT