Mohan Invest & Trading Co (P) Ltd., V. DCIT, Circle-5(1),

ITA 4149/DEL/2002

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58714 (ITAT-DELHI)
• Duration Of Justice: 9 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 08-12-2011
• Assessment Year: 1999-2000
• Appeal Filed On: 24-10-2002
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RA J TANDON
• Keywords: Capital asset; Business income; Earning of tax free income; Retrospective amendment
• Section: 14A; 147; 148; 263; 10; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `E: NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER I.T. A. NO.4149/DEL/2002 ASSESSMENT YEAR : 1999-2000 MOHAIR INVESTMENT AND TRADING DY. COMMISSIONER OF INCOME-TAX, CO. (P) LTD., VS. CIRCLE 5(1), NEW DELHI. 15, AURANGZEB ROAD, NEW DELHI. PAN NO. AAACM034D (APPELLANT) (RESPONDEN T) APPELLANT BY : SHRI AJAY VOHRA, ADVOCATE & SHRI GAURAV JAIN, CA. RESPONDENT BY : SHRI RAJ TANDON, CIT-DR. O R D E R PER K.D. RANJAN, ACCOUNTAT MEMBER: THIS APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 199 9-2000 ARISES OUT OF THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APP EALS)-VIII, NEW DELHI. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS REPR ODUCED AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN U PHOLDING THE DISALLOWANCE OF INTEREST OF RS.24,441,238 IN TH E COMPUTATION OF `INCOME FROM BUSINESS AS CLAIMED BY THE ASSESSEE COMPANY. 2 2. DURING THE COURSE OF HEARING THE LEARNED AUTHORI ZED REPRESENTATIVE OF THE ASSESSEE DURING THE COURSE OF HEARING FILED THE FOLLOWING ADDITIONAL GROUND:- 2. WITHOUT PREJUDICE, THE CIT(APPEALS) ERRED ON FA CTS AND IN LAW IN NOT DIRECTING THE ASSESSING OFFICER TO ALLOW SET-OFF OF BROUGHT FORWARD LOSSES AGGREGATING TO RS.13,63,63,9 18/- AGAINST BUSINESS INCOME ASSESSED IN THE ASSESSMENT ORDER. 2.1 THAT THE ASSESSING OFFICER MAY BE DIRECTED TO A LLOW SET-OFF OF BROUGHT FORWARD BUSINESS LOSSES AVAILABLE WITH THE APPELLANT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 72 OF THE INCOME-TAX ACT, 1961. IT HAS BEEN SUBMITTED THAT THE ASSESSEE FILED RETUR N OF INCOME AT BUSINESS LOSS OF RS.1,49,20,992/-. THE ASSESSEE HAD ALSO UNABSOR BED BROUGHT FORWARD LOSSES IN ACCORDANCE WITH PROVISIONS OF SEC. 72 OF THE INCOME-TAX ACT, 1961. HOWEVER, SINCE THE RETURN OF INCOME WAS FILED AT LO SS, NO SET OFF OF BROUGHT FORWARD LOSSES WAS CLAIMED IN THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR. IN THE ASSESSMENT ORDER THE ASSES SING OFFICER DISALLOWED INTEREST EXPENDITURE AGGREGATING TO RS.2,44,41,288/ - UNDER SEC. 14A AND ACCORDINGLY ASSESSED THE BUSINESS INCOME AT RS.95,2 0,246/-. WHILE COMPLETING THE ASSESSMENT THE ASSESSING OFFICER DID NOT ALLOW SET OFF OF BROUGHT FORWARD LOSSES AVAILABLE TO THE ASSESSEE IN ACCORDANCE WITH PROVISIONS OF SEC. 72 OF THE ACT. THE AFORESAID AC TION OF THE AO WAS SPECIFICALLY CHALLENGED BEFORE THE CIT(A) VIDE GROU ND NO.2. HOWEVER, THE 3 LEARNED CIT(A) WHILE DISPOSING OF THE APPEAL DID NO T DECIDE THE SAID GROUND RAISED BY THE ASSESSEE. IT WAS THEREFORE, SUBMITTE D THAT SINCE AFORESAID SET OFF IS LEGITIMATELY AVAILABLE TO THE ASSESSEE AS PE R PROVISIONS OF LAW, THE LEARNED CIT(A) HAS ERRED IN NOT DECIDING THE SAME. IN VIEW OF THESE FACTS THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT ADDIT IONAL GROUND RAISED WHICH WAS INADVERTENTLY OMITTED IN THE MEMORANDUM OF APPE AL, BE ADMITTED AS INVESTIGATION OF FACTS IS NOT REQUIRED AND THE ADDI TIONAL GROUND SO RAISED IS BEING PURE LEGAL ISSUE. ON THE OTHER HAND, THE L EARNED SR. DR VEHEMENTLY OPPOSED THE MOVE OF THE ASSESSEE FOR ADMISSION OF A DDITIONAL GROUND. IT HAS BEEN SUBMITTED THAT ADDITIONAL GROUND HAS BEEN RAIS ED AFTER EXPIRY OF PERIOD OF 9 YEARS SINCE WHEN THE CIT(A) HAD DECIDED THE IS SUE. THERE SHOULD BE SOME REASON TO EXPLAIN THE DELAY IN FILING THE ADDI TIONAL GROUND OF APPEAL. HOWEVER, IT WAS CLARIFIED BY THE LEARNED COUNSEL FO R THE ASSESSEE THAT THE ADDITIONAL GROUND WAS RAISED ON 17.12.2005, WHICH W AS ADMITTED ON 27.02.2006. 3. WE HAVE GONE THROUGH THE RECORDS AND FIND THAT T HE SAID ADDITIONAL GROUND HAS BEEN ADMITTED BY THE BENCH VIDE ORDER DA TED 27.02.2006 AS RECORDED ON THE ORDER-SHEET. SINCE THE LEARNED CIT (A) HAS NOT ADJUDICATED UPON THIS GROUND OF APPEAL THOUGH THE SAME WAS SPEC IFICALLY RAISED,, IT WILL BE APPROPRIATE TO SET ASIDE THE MATTER TO THE FILE OF THE LEARNED CIT(A) WITH 4 THE DIRECTIONS TO DECIDE THIS GROUND OF APPEAL IN A CCORDANCE WITH LAW. WE ORDER ACCORDINGLY. 4. THE REMAINING ISSUE FOR CONSIDERATION RELATES TO UPHOLDING THE DISALLOWANCE OF INTEREST UNDER SEC. 14A IN RESPECT OF EXEMPT INCOME FROM DIVIDENDS. THE FACTS OF THE CASE STATED IN BRIEF A RE THAT THE ASSESSEE RECEIVED DIVIDEND FROM MAX INDIA LTD. AMOUNTING TO RS.10.18, 57,783/-. DURING THE RELEVANT PERIOD THE ASSESSEE HAD TOTAL TRADING ASSE TS OF RS.24,70,31,783/- OUT OF WHICH SHARES OF M/S. MAX INDIA LTD. WERE OF RS.1 9,61,43,,895/-. THE ASSESSEE HAD DEBITED AN AMOUNT OF RS.3,28,14,797/- TO PROFIT & LOSS ACCOUNT ON ACCOUNT OF INTEREST PAID. ON A QUERY BEING RAIS ED, IT WAS EXPLAINED BY THE ASSESSEE THAT OUT OF TOTAL INTEREST PAID, INTEREST OF RS.7,80,188/- RELATES TO LOANS TAKEN FOR ACQUIRING CAPITAL ASSETS AND THE SA ME WAS ADDED BACK IN COMPUTING THE TOTAL INCOME. BALANCE AMOUNT OF RS.3 ,20,34,829/- RELATED TO THE LOANS TAKEN FOR ACQUIRING TRADING ASSETS AND LO ANS GIVEN. IN VIEW OF THESE FACTS THE ASSESSING OFFICER APPLIED THE PROVI SIONS OF SEC. 14A AND DISALLOWED THE INTEREST RELATABLE TO EXEMPT INCOME AT RS.2,44,41,238/-. 5. ON APPEAL THE LEARNED CIT(A) RELYING ON VARIOUS DECISIONS OBSERVED THAT NO DEDUCTION WAS ALLOWABLE IN RESPECT OF EXPEN DITURE OF INTEREST IN RELATION TO INCOME WHICH DOES NOT FORM PART OF TOTA L INCOME. THE LEARNED CIT(A) THEREFORE, UPHELD THE DISALLOWANCE. 5 6. BEFORE US THE LEARNED AR OF THE ASSESSEE SUBMITT ED THAT DELHI HIGH COURT IN THE CASE OF THE ASSESSEE HAS DECIDED THE I SSUE AGAINST THE ASSESSEE. HOWEVER, THE ASSESSEE IS AGITATING THE DISALLOWANCE WHICH HAS BEEN MADE BY INVOKING THE PROVISO TO SEC. 14A ACCORDING TO WHICH , THE AO CANNOT ENHANCE THE ASSESSMENT OR REDUCE THE REFUND FOR ANY ASSTT. YEAR BEGINNING ON OR BEFORE 1.04.2001. HE PLACED RELIANCE ON THE FOL LOWING DECISIONS:- (I) CIT VS. PAUL JOHN, DELICIOUS CASHEW CO. IN IT APPEA L NO.587 OF 2009 (KERALA) DECISION DATED 14 TH JANUARY, 2010. (II) CIT VS. PNB FINANCE AND INDUSTRIES LTD. IN ITA NO.1 759 OF 2010 (DELHI) DECISION DATED 15 TH NOVEMBER, 2010. (III) CIT VS. EWS FINANCE AND INVESTMENT LTD. IN TAX CASE (APPEAL) NO.1205 OF 2007 DECISION DATED 6 TH SEPTEMBER, 2007. (IV) V. UPPALAIAH VS. DCIT (2005) 94 ITD 178 (HYD.) (SMC ). 7. ON THE OTHER HAND, LEARNED CIT(DR) SUBMITTED THA T IT IS NOT A CASE OF REOPENED ASSESSMENT. IT IS A CASE OF FIRST ASSESSM ENT. THEREFORE, PROVISO TO SEC. 14A IS NOT APPLICABLE. HE PLACED RELIANCE ON THE FOLLOWING DECISIONS:- (1) MAXOPP INVESTMENT LTD. VS. CIT (2011) 15 TAXMANN. C OM 390 (DELHI). (2) GODREJ & BOYCE MFG. CO. LTD. VS. DCIT (2010) 328 IT R 181 (BOM.). (3) HONDA SIEL POWER PRODUCTS LTD. VS. DCIT (2011) 197 TAXMAN 415 (DELHI). (4) ACIT VS. TUBE INVESTMENT OF INDIA LTD. (2011) 15 TA XMANN.COM 318 (CHENNAI)(TM). 6 (5) INSAALLAH INVESTMENT LTD. VS. ITO (2008) 23 SOT 130 (DELHI). (6) AQUARIUS TRAVELS (P) LTD VS. ITO (2008) 111 ITD 53 (DELHI)(SB). (7) HARISH KRISHNAKANT BHATT VS. ITO (2004) 91 ITD 311 (AHD.). (8) DCIT VS. S.G. INVESTMENT & INDUSTRIES LTD. (2004) 89ITD 44 (KOL.). (9) CATHOLIC SYRIAN BANK LTD. VS. CIT (2010) 330 ITR 53 6 (KER.). (10) KALPATARU CONSTRUCTION OVERSEAS (P) LTD. VS. D CIT (2007) 13 SOT 194 (MUM.). 194 (MUM.). (11) DHANUKA & SONS VS. CIT (2011) 201 TAXMAN 105 ( CAL.). 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. SECTION 14A WAS INSERTED IN THE STATUTE BY THE FINANCE ACT, 2001 WITH RETROSPECTIVE EFFECT FROM 1.04.1962 AND READS AS UNDER:- 14A. EXPENDITURE INCURRED IN RELATION TO INCOME NOT INCLUDIBLE IN TOTAL INCOME FOR THE PURPOSES OF COMPUTING THE TOTAL INCOME UNDE R THIS CHAPTER, NO DEDUCTION SHALL BE ALLOWED IN RESPECT O F EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THIS ACT. PROVISO TO SEC. 14A WAS INSERTED BY THE FINANCE ACT , 2002 WITH RETROSPECTIVE EFFECT FROM 11.05.2001 AND READS AS UNDER:- PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL EMPOW ER THE ASSESSING OFFICER EITHER TO REASSESS UNDER SECT ION 147 OR PASS AN ORDER ENHANCING THE ASSESSMENT OR REDUCING A REFUND ALREADY MADE OR OTHERWISE INCREASING THE LIABILITY OF THE 7 ASSESSEE UNDER SECTION 154, FOR ANY ASSESSMENT YEAR BEGINNING ON OR BEFORE THE 1 ST DAY OF APRIL, 2001. CBDT CIRCULAR NO.14 OF 2001 DATED 12 TH DECEMBER, 2001 EXPLAINED THE SCOPE AND EFFECT OF THE NEW PROVISION. IT HAS BEEN EXPLAINED THAT NEW SEC. 14A HAS BEEN INSERTED SO AS TO CLARIFY THE INTENTIO N OF THE LEGISLATURE SINCE INCEPTION OF THE INCOME-TAX ACT, 1961, THAT NO DEDU CTION SHALL BE MADE IN RESPECT OF ANY EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF TOTAL INCOME UNDER THE INCOME-TAX ACT. IT AS ALSO CLARIFIED THAT ASSESSMENTS WHERE PROCEEDINGS H AVE BECOME FINAL BEFORE 1.04.2001, THE ASSESSMENT SHOULD NOT BE REOPENED UN DER SEC. 147/154 OF THE ACT TO DISALLOW EXPENDITURE RELATABLE TO EXEMPT INC OME BY APPLYING THE PROVISION OF SEC. 14A OF THE ACT. THE FINANCE ACT, 2002 AMENDED SEC. 14A BY INSERTING A PROVISO THAT ASSESSMENTS WHERE PROCE EDINGS HAVE BECOME FINAL BEFORE 1.04.2001, SHOULD NOT BE REOPENED UNDE R SEC. 147 OF THE ACT TO DISALLOW EXPENDITURE RELATING TO EXEMPT INCOME BY A PPLYING THE PROVISIONS OF SEC. 14A OF THE ACT. THE PROVISO WAS INSERTED W ITH RETROSPECTIVE EFFECT FROM 11 TH MAY, 2001, I.E. THE DATE ON WHICH THE FINANCE BILL , 2001 RECEIVED THE ASSENT OF THE PRESIDENT OF INDIA. FROM THE LA NGUAGE EMPLOYED IN PROVISO IT IS CLEAR THAT ACTION UNDER SEC. 147 OR 154 CANNO T BE TAKEN WHERE PROCEEDINGS HAVE ALREADY BEEN COMPLETED. IN THE CA SE OF THE ASSESSEE, PROCESSING UNDER SEC. 143(1) WAS MADE. THEREAFTER, THE AO ISSUED NOTICE 8 UNDER SEC. 143(2) IN ORDER TO VERIFY THE CLAIMS MAD E IN THE RETURN OF INCOME. THEREFORE, THE ASSESSEES CASE HAS NOT BEEN REOPENE D UNDER SEC. 147 NOR THE SETTLED ISSUES HAVE BEEN INTENDED TO BE UPSET UNDER SEC. 154 OF THE ACT. 9. THE DECISIONS RELIED UPON BY THE ASSESSEE ARE NO T APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. IN THE CASE OF PAUL JOHN DELICIOUS CASHEW CO. (SUPRA), NOTICE UNDER SEC 263 WAS ISSUED BY THE CIT FOR THE PURPOSE OF DISALLOWANCE OF EXPENDITURE RELATABLE TO EXEMPT INC OME UNDER SEC. 10(2) OF THE ACT. THE COURT HELD THAT PROVISO TO SEC. 14A P ROHIBITS ALL SITUATIONS WHERE THE AO IS OTHERWISE ENTITLED OR REQUIRED TO R EVISE AN ASSESSMENT WHICH INCLUDES ORDERS ISSUED BY THE COMMISSIONER UNDER SE C. 263 OR ORDER OF ENHANCEMENT ISSUED BY THE CIT(A) IN EXERCISE OF HIS POWERS REFERRED TO IN SEC. 251 OF THE ACT. SINCE IN THE CASE BEFORE US T HE ASSESSMENT HAS NOT BEEN REOPENED UNDER SEC. 154 OR 147 OR UNDER SEC. 263, T HE FACTS OF THE CASE BEFORE US ARE DISTINGUISHABLE FROM THE FACTS OF THE CASE IN CIT VS. PAUL JOHN DELICIOUS CASHEW CO. (SUPRA). 10. IN THE CASE OF CIT VS. PNB FINANCE & INVESTMENT S LTD. (SUPRA), THE RETURN OF INCOME FOR ASSESSMENT YEAR 2001-02 WAS PR OCESSED UNDER SEC. 143(1). THEREAFTER, THE AO VIDE NOTICE DATED 27 TH MARCH, 2008 REOPENED THE ASSESSMENT UNDER SEC. 147/148 INASMUCH AS HE WAS OF THE VIEW THAT THE DIVIDEND INCOME FOR WHICH EXEMPTION WAS CLAIMED BY THE ASSESSEE, 9 PROPORTIONATE EXPENSES SHOULD HAVE BEEN DISALLOWED UNDER SEC. 14A OF THE ACT. AS MENTIONED ABOVE, THE FACTS OF THE CASE ARE DISTINGUISHABLE AS IN THE CASE OF ASSESSEE NO PROCEEDINGS UNDER SEC.147/148 H AVE BEEN INITIATED. 11. IN THE CASE OF EWS FINANCE & INVESTMENT LTD. (S UPRA) THE AO INITIATED PROCEEDINGS UNDER SEC. 148 FOR THE PURPOS E OF DISALLOWANCE OF INTEREST RELATABLE TO EXEMPTED INCOME UNDER SEC. 10 (33) OF THE ACT. IN THIS CASE ASSESSMENT YEARS INVOLVED WERE 1999-2000 AND 2 000-01 I.E. PRIOR TO INSERTION OF SEC. 14A OF THE ACT. IT WAS HELD THAT THE PROCEEDINGS WHICH HAVE BECOME FINAL BEFORE 1.4.2001, SHOULD NOT BE RE-OPEN ED U/S 147 OF THE ACT. THE FACTS OF THIS CASE ARE ALSO NOT APPLICABLE TO T HE FACTS OF THE ASSESSEES CASE AS IN THE CASE OF ASSESSEE THE AO HAD ISSUED N OTICE UNDER SEC. 143(2) FOR THE PURPOSE OF VERIFICATION OF CLAIM MADE BY TH E ASSESSEE IN THE RETURN OF INCOME. IF THE CONTENTION OF THE ASSESSEE IS ACCEP TED TO BE CORRECT, IT WOULD MEAN THAT WHERE PROCESSING UNDER SEC. 143(1) HAS BE EN DONE, NOTICE UNDER SEC. 143(2) COULD NOT HAVE BEEN ISSUED. THIS WILL BE CONTRARY TO THE SCHEME OF ASSESSMENT. 12. ON THE CONTRARY HONBLE DELHI HIGH COURT IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. VS. DCIT (2011) 197 TAXMAN 415 (DELHI) HAS HELD THAT THE OBJECT AND PURPOSE OF PROVISO TO SEC. 14A IS TO ENSURE THAT INTRODUCTION OF SECTION 14A WITH RETROSPECTIVE EFFECT IS NOT MAD E AS A TOOL TO REOPEN PAST 10 CASES WHICH HAVE ATTAINED FINALITY. PROVISO DOES N OT STATE THAT SEC. 14A CANNOT BE RELIED UPON DURING COURSE OF ORIGINAL ASS ESSMENT PROCEEDINGS. THERE IS NO DISPUTE ABOUT THE FACT THAT ASSESSMENT PROCEEDINGS IN THIS CASE ARE ORIGINAL ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER HAS NOT REOPENED THE ASSESSMENT UNDER SEC. 147 OR UNDER SEC. 154 OF THE ACT. THEREFORE, AS PER DECISION OF HONBLE DELHI HIGH COURT IN THE CAS E OF HONDA SIEL POWER PRODUCTS LTD. (SUPRA), PROVISO TO SEC. 14A WILL NOT BE APPLICABLE DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. WE WILL LIKE TO MENTION HERE THAT THE DECISION OF HONBLE DELHI HIGH COURT IN THE CAS E OF PNB FINANCE & INVESTMENTS LTD. (SUPRA) IS DATED 15 TH NOVEMBER, 2010 WHEREAS THE DECISION IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. (SUPR A) IS DATED 14 TH FEBRUARY, 2011. MOREOVER, THE FACTS IN BOTH THE CASES ARE DI FFERENT AS ALREADY MENTIONED. SIMILAR VIEW HAS BEEN TAKEN BY ITAT IN THE CASE OF ACIT VS. TUBE INVESTMENT OF INDIA LTD. (2011) 15 TAXMANN.COM 318 (CHENNAI)(TM). IN THIS CASE, RELYING ON THE DECISION OF HONBLE DE LHI HIGH COURT IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. (SUPRA), IT HAS B EEN HELD THAT THE PROVISO TO SEC. 14A ONLY BARS RE-ASSESSMENT/RECTIFICATION A ND NOT ORIGINAL ASSESSMENT. IT HAS BEEN HELD THAT PROVISO DOES NOT STIPULATE AND STATE THAT SECTION 14A CANNOT BE RELIED UPON DURING THE COURSE OF THE ORIGINAL ASSESSMENT PROCEEDINGS. FURTHER, THE OBJECT AND PU RPOSE OF PROVISO IS TO 11 ENSURE THAT THE RETROSPECTIVE AMENDMENT IS NOT MADE AS A TOOL TO REOPEN PAST CASES WHICH HAVE ATTAINED FINALITY. SIMILAR VIEW H AS BEEN TAKEN IN THE CASE OF HARISH KRISHNAKANT BHATT VS. ITO (2004) 91 ITD 3 11 (AHD.). IN THIS CASE INTIMATION WAS SENT UNDER SEC. 143(1) AND THEREAFTE R SCRUTINY ASSESSMENT WAS MADE UNDER SEC. 143(3). IT COULD NOT BE SAID TO BE A CASE OF RE-ASSESSMENT OR ENHANCEMENT OF ASSESSMENT. IT WAS MAKING OF ASSESS MENT ITSELF. SINCE IT WAS NOT PROCEEDINGS UNDER SEC. 154 WHICH WERE OPTED OR RESORTED TO BY THE AO, IT WOULD NOT BE A CASE OF INCREASE IN LIABILITY OF THE ASSESSEE UNDER SEC. 154 AS WELL. 13. IN VIEW OF ABOVE DISCUSSION IT IS HELD THAT AFT ER PROCESSING OF RETURN UNDER SEC. 143(1), THE AO IN ORDER TO VERIFY THE CL AIM MADE IN THE RETURN, ISSUED NOTICE UNDER SEC. 143(2). THEREFORE, THE PR OVISO TO SEC. 14A WILL NOT BE PRESSED IN SERVICE WHILE COMPLETING THE ORIGINAL ASSESSMENT. IT CANNOT BE SAID TO BE A CASE OF PROCEEDINGS INITIATED UNDER SE C. 147 OR UNDER SEC. 154 OF THE ACT. WE THEREFORE, HOLD THAT THE ASSESSING OFF ICER WAS JUSTIFIED IN DISALLOWING THE CLAIM OF INTEREST UNDER SEC. 14A OF THE ACT. 14. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 15. THIS DECISION IS PRONOUNCED IN THE OPEN COURT O N 17 TH FEBRUARY, 2012. SD/- SD/- (I.P. BANSAL) (K.D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 17 TH FEBRUARY, 2012. 12 ITA NO.4149/DEL/2002 COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.