DCIT, New Delhi V. M/s. Bharti Overseas (P) Ltd., New Delhi

ITA 460/DEL/2013

• Counselvise Citation: 46020114 RSA 2013
• Duration Of Justice: 2 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 24-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A MISRA
• Assessee Lawyers: ANIL BHALLA
• Keywords: Earning of tax free income
• Section: 143(3); 14A

Judgement Text

I.T.A. NO.: 460/DEL/2013 ASSESSMENT YEARS 2008-09 PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI A BENCH, NEW DELHI [CORAM: PRAMOD KUMAR, AM AND C.M. GARG, JM] I.T.A. NO.: 460/DEL/2013 ASSESSMENT YEAR: 2008-09 DEPUTY COMMISSIONER OF INCOME TAX, .APPEL LANT CIRCLE 2(1), NEW DELHI VS. BHARTI OVERSEAS (P) LTD., .RESPONDENT (FORMERLY BHARTI ENTERPRISES (HOLDINGS) (P) LTD.), H-5/12, QUTAB AMBIENCE MEHRAULI ROAD, NEW DELHI - 110 030 [PAN: AAACB 7732 P] APPEARANCES BY: SMT. A. MISRA, FOR THE APPELLANT ANIL BHALLA, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING: 22 ND JANUARY, 2015 DATE OF PRONOUNCING THE ORDER: 23 RD MARCH, 2015 O R D E R PER PRAMOD KUMAR: 1. THIS IS AN APPEAL FILED BY THE ASSESSING OFFICER AND IS DIRECTED AGAINST THE ORDER DATED 1 ST NOVEMBER, 2012 PASSED BY THE LD. CIT(A) IN THE MAT TER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT), FOR THE ASSESSMENT YEAR 2008-09. 2. GRIEVANCE RAISED BY THE ASSESSING OFFICER IS AS FOLLOWS :- 1. WHETHER THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN DELETING THE ADDITION OF RS.2,75,99,750/- MADE U/S 14A. A) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS THAT RU LE 8D IS APPLICABLE FROM A.Y. 2008-09. FURTHER, DISALLOWANCE OF ADMINIS TRATIVE EXPENSES I.T.A. NO.: 460/DEL/2013 ASSESSMENT YEARS 2008-09 PAGE 2 OF 8 AND INTEREST EXPENSES ON EARNING OF DIVIDEND INCOME CLAIMED EXEMPT IS ALSO HELD/PERMITTED BY THE HONBLE SUPREME COURT IN T HE CASE OF CIT VS. UNITED GENERAL TRUST, 200 ITR 488 (SC). B) IT IS A LEGAL ISSUE AND DEPARTMENT IS IN APPEAL WHICH IS PENDING BEFORE VARIOUS APPELLATE AUTHORITIES AND SINCE RULE 8D W.E.F . 24.03.2008 GIVES THE METHOD FOR DETERMINING AMOUNT OF EXPENDITURE IN R ELATION TO INCOME WHICH DO NOT FORM PART OF INCOME. 3. THE MATERIAL FACTS OF THE CASE ARE LIKE THIS. D URING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS EARNED DIVIDEND INCOME OF RS.89,02,540/- OUT OF WHICH RS.68,44,790/- HAVE BEE N CLAIMED AS EXEMPT UNDER SECTON10(34)OF THE ACT BUT THE ASSESSEE HAS OFFERED ONLY RS.6,84,479/-, BEING 10% OF THE DIVIDEND RECEIPTS OF TAX EXEMPT DIVIDENDS OF RS.68, 44,790/-, AS DISALLOWABLE UNDER SECTION 14A OF THE ACT ON NOTIONAL BASIS OUT OF ADMINISTRAT IVE EXPENSES. HE WAS OF THE VIEW THAT INVOCATION OF SECTION 14A IS AUTOMATIC AND COMES I NTO OPERATION WITHOUT ANY EXEMPTION AS SOON AS DIVIDEND IS ACCLAIMED AS EXEMPT. IT WA S IN THIS BACKDROP AND APPLYING RULE 8D, THE ASSESSING OFFICER COMPUTED FURTHER DISALLOWANCE UNDER SECTION 14A OF THE ACT AS FOLLOWS :- (ALL FIGURES IN RS.) (I) AMOUNT OF EXPENDITURE DIRECTLY RELATING TO INCOME WHICH DOES NOT FORM PART OF TOTAL INCOME NIL (II) A AMOUNT OF INTEREST BY WHICH IS NOT DIRECTING ATTRIBUTABLE TO ANY PARTICULAR INCOME/RECEIPT (AS PER NOTES 4 TO THE COMPUTATION OF INCOME) 5,52,83,131 B AVERAGE VALUE OF INVESTMENT RELATED TO EXEMPT INCOME (AS SUBMITTED BY ASSESSEE) - OPENING BALANCE OF INVESTMENTS - CLOSING BALANCE OF INVESTMENTS - AVERAGE VALUE OF ABOVE INVESTMENT 141,08,46,569 24,30,65,835 82,69,56,202 C AVERAGE OF TOTAL ASSETS - OPENING BALANCE OF ASSETS - CLOSING BALANCE OF ASSETS 271,57,46,116 102,35,42,451 I.T.A. NO.: 460/DEL/2013 ASSESSMENT YEARS 2008-09 PAGE 3 OF 8 - AVERAGE VALUE OF ABOVE ASSETS - 186,96,44,283 8 2,69,56,202 A X B/C = 5,52,83,131 X ------------------ 186,9 6,44,283 2,44,52,100 (III) AVERAGE VALUE OF INVESTMENT (AS SUBMITTED BY ASSESSEE) - OPENING BALANCE OF INVESTMENTS - CLOSING BALANCE OF INVESTMENTS - AVERAGE VALUE OF ABOVE INVESTMENT - % OF AVERAGE VALUE OF INVESTMENT 141,08,46,569 24,30,65,835 82,69,56,202 41,34,781 DISALLOWANCE U/S 14A OF THE ACT I.E. AGGREGATE OF (I), (II) AND (III) 2,85,86,881 LESS: ALREADY DISALLOWED BY ASSESSEE U/S 14A OF THE I.T. ACT (-) 6,84,479 DISALLOWANCE U/S 14A OF THE I.T. ACT 2,79,02,402 HENCE, AN AMOUNT OF RS.2,79,02,402/- IS DISALLOWED U/S 14A OF THE I.T. ACT AND ADDED TO THE TOTAL TAXABLE INCOME OF THE ASSESSEE C OMPANY. (ADDITION ARS.2,79,02,402) 4. AGGRIEVED BY THE DISALLOWANCE SO MADE, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO DELETED THIS DISALLOWANCE AND, IN SUPPORT, OBSERVED AS FOLLOWS:- FROM A PERUSAL OF THE ASST. ORDER PARA-4, IT HAS B EEN SEEN THAT THE AO IS NOT SATISFIED WITH THE VERSION OF THE APPELLANT THAT IT HAD INCURRED RS.6,84,479/- BEING 10% OF NET EXEMPT INCOME AS DISALLOWANCE BUT HE HAS NOT GIVEN THE BASIS AS TO WHY HE IS NOT SATISFIED WITH VERSION OF THE APPELLANT. THE AO HAS WORKED OUT DISALLOWANCE OF THE EXPENDITURE OF RS.2, 79,02,402/- FOR EARNING OF EXEMPT INCOME OF RS.68,44,790/- WHICH IS AN ABSU RDITY. HOWEVER, DURING APPEAL PROCEEDINGS THE ISSUE HAS BEEN DISCUSSED IN DETAIL BY THE UNDERSIGNED AND IT HAS BEEN FOUND THAT ACTUALLY THE AMOUNT OF I NTEREST ATTRIBUTABLE TO THE EARNING OF DIVIDEND INCOME SHOULD HAVE BEEN TAKEN A T PROPORTION OF RS.83 LACS FOR THE PURPOSE OF APPLYING RULE 8D (AS SUBMIT TED BY THE APPELLANT NOTED ABOVE) AND NOT RS.5,52,83,131/- AS ADOPTED BY THE AO. ADOPTING THE FIGURE OF RS.83 LACS; FOR THE PURPOSE OF RULE 8D THE DISAL LOWANCE WORKS OUT TO RS.37,11,031/- AS AGAINST RS.6,84,479/- OFFERED BY THE APPELLANT. THEREFORE THE DISALLOWANCE IS CONFIRMED TO THE EXTENT OF RS.3 0,26,552/- ONLY I.E. (37,11,031 6,84,479). THE GROUND OF APPEAL IS PA RTLY ALLOWED. 5. THE ASSESSING OFFICER IS AGGRIEVED OF THE PARTIA L RELIEF SO GRANTED BY THE LD. CIT(A) AND IS IN APPEAL BEFORE US. I.T.A. NO.: 460/DEL/2013 ASSESSMENT YEARS 2008-09 PAGE 4 OF 8 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE AP PLICABLE LEGAL POSITION. 7. AS CAN BE CLEARLY DISCERNED FROM THE COMPUTATION OF DISALLOWANCE BY THE ASSESSING OFFICER, THE SHORT POINT OF DISPUTE IN THE PRESENT CASE IS DEFINITION OF VARIABLE 8D(2)(II)(A), WHILE THE A.O. HAS ADOPTED THIS VARIABLE AS RS.5,52 ,83,131/-, THE CIT(A) HAS ADOPTED THE SAME AS RS.83,90,178/-. AS A MATTER OF FACT, ACCOR DING TO THE ASSESSEE, THE AMOUNT AGAINST THIS VARIABLE (I.E. COMMON INTEREST EXPENDITURE NOT SPECIFICALLY ALLOCATED TO TAX EXEMPT AND TAXABLE INCOME) IS NIL AS EVIDENT FROM NOTE 4 TO TH E COMPUTATION OF INCOME WHICH IS REPRODUCED BELOW :- (C) REFERENCE IS INVITED TO NOTE 4 OF THE COMPUTATIO N OF INCOME, ATTACHED AT PAGE 2. TOTAL INTEREST DEBITED TO PROFIT & 5,52,83,131 LOSS ACCOUNT INTEREST ALLOWABLE AS INTEREST CHARGED AND SURRENDERED ON INCOME LESS: INTEREST ON LOAN GIVEN TO FASPL ON ADJUSTE D AGAINST INTEREST WHICH INTEREST HAS BEEN CHARGED 2,96,70,300 INCOME OF RS.29,94,664 2,56,12,831 LESS: INTEREST ON LOAN GIVEN TO BTTL ON WHICH INTEREST HAS BEEN CHARGED 6,59,716 ADJUSTED AGAINST INTEREST 2,49,53,115 INCOME LESS: INTEREST SURRENDERED IN COMPUTATION OF INCOME - INTEREST ON LOAN SUBSEQUENT TO BHARTI REALTY 78,04,507 CEASING TO BE SUBSIDIARY AS A CONSEQUENCE OF DEMERGER DISALLOWED I.T.A. NO.: 460/DEL/2013 ASSESSMENT YEARS 2008-09 PAGE 5 OF 8 - INTEREST ON LOAN TAKEN FOR 87,58,430 1,65,62,937 INVESTMENT IN FASPL DISALLOWED ____________ INTEREST ON LOAN GIVEN TO BHARTI REALTY UP TO THE TIME IT WAS --------------- SUBSIDIARY OF BOPL, AS ALLOWABLE 83,90,178 IN VIEW OF THE DECISION OF SUPREME --------------- COURT IN SA BUILDERS 228 ITR 1 THERE IS NO INTEREST WHICH IS ATTRIBUTABLE FOR THE PUR POSES OF RULE 8D. THE SUM OF RS.83,90,178/- IS THE ONLY BALANCE INTEREST WHICH AS P ER ASSESSEE IS ALLOWABLE. 8. IT IS IMPORTANT TO BEAR IN MIND THE FACT THAT WH AT CAN BE ALLOCATED UNDER RULE 8D2(II) IS THE AMOUNT OF EXPENDITURE BY WAY OF INTEREST OTH ER THAN INTEREST DIRECTLY RELATABLE TO TAX EXEMPT INCOME AS ALSO OTHER THAN INTEREST DIRECTLY RELATED TO TAXABLE INCOME. TO THIS EXTENT, THE INCONGRUITY IN RULE 8D IS TO BE READ DO WN AS WAS HELD BY A CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ACIT VS. CHAMPION COMM ERCIAL CO. LTD. (139 ITD 108) IN THE FOLLOWING WORDS :- 12. IRONICALLY, HOWEVER, THE DEFINITION OF VARIAB LE A EMBEDDED IN FORMULA UNDER RULE 8D(2)(II) IS CLEARLY INCONGRUOUS INASMUC H WHILE IT SPECIFICALLY EXCLUDES INTEREST EXPENDITURE DIRECTLY RELATED TO T AX EXEMPT INCOME, IT DOES NOT EXCLUDE INTEREST EXPENDITURE DIRECTLY RELATED T O TAXABLE INCOME. RESULTANTLY, WHILE RULE 8D(2)(II) ADMITTEDLY SEEKS TO ALLOCATE EXPENDITURE BY WAY OF INTEREST, WHICH IS NOT DIRECTLY ATTRIBUTABLE TO ANY PARTICULAR INCOME OR RECEIPT IT ENDS UP A LLOCATING EXPENDITURE BY WAY OF INTEREST, WHICH IS NOT DIRECTLY ATTRIBUTABLE TO ANY PARTICULAR INCOME OR R ECEIPT, PLUS INTEREST WHICH IS DIRECTLY ATTRIBUTABLE TO TAXABLE INCOME (EMPHASIS BY UNDERLINING SUPPLIED BY US) . THIS INCONGRUITY WILL BE MORE GLARING WITH THE HE LP OF FOLLOWING SIMPLE EXAMPLE: IN THE CASE OF A & CO LTD, TOTAL INTEREST EXPENDITU RE IS RS.1,00,000, OUT OF WHICH INTEREST EXPENDITURE IN RESPECT OF ACQUIRING SHARES FROM WHICH TAX FREE DIVIDEND EARNED IS RS.10,000. OUT OF THE BALANCE RS .90,000, THE ASSESSEE HAS PAID INTEREST OF RS.80,000 FOR FACTORY BUILDING CON STRUCTION WHICH CLEARLY RELATES TO THE TAXABLE INCOME. THE INTEREST EXPENDI TURE WHICH IS NOT DIRECTLY ATTRIBUTABLE TO ANY PARTICULAR RECEIPT OR INCOME I S THUS ONLY RS .10,000. I.T.A. NO.: 460/DEL/2013 ASSESSMENT YEARS 2008-09 PAGE 6 OF 8 HOWEVER, IN TERMS OF THE FORMULA IN RULE 8 D (2)(II ), ALLOCATION OF INTEREST WHICH IS NOT DIRECTLY ATTRIBUTABLE TO ANY PARTICULA R INCOME OR RECEIPT WILL BE FOR RS.90,000 BECAUSE, AS PER FORMULA THE VALUE OF A (I.E. SUCH INTEREST EXPENSES TO BE ALLOCATED BETWEEN TAX EXEMPT AND TAX ABLE INCOME) WILL BE A = AMOUNT OF EXPENDITURE BY WAY OF INTEREST OTHER TH AN THE AMOUNT OF INTEREST INCLUDED IN CLAUSE (I) [ I.E. DIRECT INTEREST EXPEN SES FOR TAX EXEMPT INCOME] INCURRED DURING THE PREVIOUS YEAR. LET US SAY THE ASSETS RELATING TO TAXABLE INCOME AN D TAX EXEMPT INCOME ARE IN THE RATIO OF 4:1. IN SUCH A CASE, THE INTEREST DISA LLOWABLE UNDER RULE 8 D(2)(II) WILL BE RS.18,000 WHEREAS ENTIRE COMMON INTEREST EX PENDITURE WILL ONLY BE RS.10,000. 13. THE INCONGRUITY ARISES BECAUSE, AS THE WORDING S OF RULE 8D(2)(II) EXIST, OUT OF TOTAL INTEREST EXPENSES, INTEREST EXPENSES D IRECTLY RELATABLE TO TAX EXEMPT INCOME ARE EXCLUDED, INTEREST EXPENSES DIREC TLY RELATABLE TO TAXABLE INCOME, EVEN IF ANY, ARE NOT EXCLUDED. 14. THE QUESTION THEN ARISES WHETHER WE CAN TINKER WITH THE FORMULA PRESCRIBED UNDER RULE 8D(2)(II) OF THE INCOME TAX R ULES, OR CONSTRUE IT ANY OTHER MANNER OTHER THAN WHAT IS SUPPORTED BY PLAIN WORDS OF THE RULE 8 D (2)(II). 15. WE FIND THAT NOTWITHSTANDING THE RIGID WORDS O F RULE 8D(2)(II), THE STAND TAKEN BY THE REVENUE AUTHORITIES ABOUT ITS AP PLICATION, AS WAS BEFORE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG CO LTD VS DCIT (328 ITR 81) = (2010-TIOL-564-HC-MUM-IT ) WHEN CONSTITUTIONAL VALIDITY OF RULE 8 D WAS IN CHALLENGE, IS THAT IT IS ONLY THE INTEREST ON BORROWED FUNDS THAT WOULD BE APPORTIONED AND THE AMOUNT OF EXPENDI TURE BY WAY OF INTEREST THAT WILL BE TAKEN (AS 'A' IN THE FORMULA) WILL EXC LUDE ANY EXPENDITURE BY WAY OF INTEREST WHICH IS DIRECTLY ATTRIBUTABLE TO ANY P ARTICULAR INCOME OR RECEIPT (FOR EXAMPLE-ANY ASPECT OF THE ASSESSEE'S BUSINESS SUCH AS PLANT/MACHINERY ETC.). THEREFORE, IT IS NOT ONLY THE INTEREST DIRE CTLY ATTRIBUTABLE TO TAX EXEMPT INCOME, I.E. UNDER RULE 6D(2)(I), BUT ALSO INTEREST DIRECTLY RELATABLE TO TAXABLE INCOME, WHICH IS TO BE EXCLUDED FROM THE DEFINITION OF VARIABLE A IN FORMULA AS PER RULE 6D(2)(II), AND RIGHTLY SO, BECAUSE IT I S ONLY THEN THAT COMMON INTEREST EXPENSES, WHICH ARE TO BE ALLOCATED AS IND IRECTLY RELATABLE TO TAXABLE INCOME AND TAX EXEMPT INCOME, CAN BE COMPUTED. THIS IS CLEAR FROM THE FOLLOWING OBSERVATIONS MADE BY THEIR LORDSHIPS OF H ONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE (SUPRA): 60. IN THE AFFIDAVIT-IN-REPLY THAT HAS BEEN FILED ON B EHALF OF THE REVENUE AN EXPLANATION HAS BEEN PROVIDED OF THE RATIONALE UND ERLYING R. 8D. IN THE WRITTEN SUBMISSIONS WHICH HAVE BEEN FILED BY THE ADD L. SOLICITOR GENERAL IT HAS BEEN STATED, WITH REFERENCE TO R. 8D(2 )(II) THAT SINCE FUNDS I.T.A. NO.: 460/DEL/2013 ASSESSMENT YEARS 2008-09 PAGE 7 OF 8 ARE FUNGIBLE, IT WOULD BE DIFFICULT TO ALLOCATE THE ACTUAL QUANTUM OF BORROWED FUNDS THAT HAVE BEEN USED FOR MAKING TAX-FRE E INVESTMENTS. IT IS ONLY THE INTEREST ON BORROWED FUNDS THAT WOULD BE APPORTIONED AND THE AMOUNT OF EXPENDITURE BY WAY OF INTEREST THAT WI LL BE TAKEN (AS 'A' IN THE FORMULA) WILL EXCLUDE ANY EXPENDITURE BY WAY OF INTEREST WHICH IS DIRECTLY ATTRIBUTABLE TO ANY PARTICULAR INCOME OR R ECEIPT (FOR EXAMPLE- ANY ASPECT OF THE ASSESSEE'S BUSINESS SUCH AS PLANT/ MACHINERY ETC.) THE JUSTIFICATION THAT HAS BEEN OFFERED IN SUPPORT OF THE RATIONALE FOR R. 8D CANNOT BE REGARDED AS BEING CAP RICIOUS, PERVERSE OR ARBITRARY. APPLYING THE TESTS FORMULATED BY THE SUPRE ME COURT IT IS NOT POSSIBLE FOR THIS COURT TO HOLD THAT THERE IS WRIT ON T HE STATUTE OR ON THE SUBORDINATE LEGISLATION PERVERSITY, CAPRICE OR IRRA TIONALITY. THERE IS CERTAINLY NO 'MADNESS IN THE METHOD'. 16. ONCE THE REVENUE AUTHORITIES HAVE TAKEN A PART ICULAR STAND ABOUT THE APPLICABILITY OF FORMULA SET OUT IN RULE 8 D(2)(II) , AND BASED ON SUCH A STAND CONSTITUTIONAL VALIDITY IS UPHELD BY HONBLE HIGH C OURT, IT CANNOT BE OPEN TO REVENUE AUTHORITIES TO TAKE ANY OTHER STAND ON THE ISSUE WITH REGARD TO THE ACTUAL IMPLEMENTATION OF THE FORMULA IN THE CASE OF ANY ASSESSEE. VIEWED THUS , THE CORRECT APPLICATION OF THE FORMULA SET O UT IN RULE 8D(2)(II) IS THAT, AS HAS BEEN NOTED BY HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ AND BOYCE (SUPRA), AMOUNT OF EXPENDITURE BY WAY OF INT EREST THAT WILL BE TAKEN (AS 'A' IN THE FORMULA) WILL EXCLUDE ANY EXPENDITUR E BY WAY OF INTEREST WHICH IS DIRECTLY ATTRIBUTABLE TO ANY PARTICULAR INCOME O R RECEIPT (FOR EXAMPLE-ANY ASPECT OF THE ASSESSEE'S BUSINESS SUCH AS PLANT/MAC HINERY ETC.). ACCORDINGLY, EVEN BY REVENUES OWN ADMISSION, INTEREST EXPENSES DIRECTLY ATTRIBUTABLE TO TAX EXEMPT INCOME AS ALSO DIRECTLY ATTRIBUTABLE TO TAXABLE INCOME, ARE REQUIRED TO BE EXCLUDED FROM COMPUTATION OF COMMON INTEREST EXPENSES TO BE ALLOCATED UNDER RULE 8D(2)(II). 17. TO THE ABOVE EXTENT, THEREFORE, WE HAVE TO PRO CEED ON THE BASIS THAT RIGOUR OF RULE 8D (2)(II) IS RELAXED IN ACTUAL IMPL EMENTATION, AND REVENUE AUTHORITIES, HAVING TAKEN THAT STAND WHEN CONSTITUT IONAL VALIDITY OF RULE 8 D WAS IN CHALLENGE BEFORE HONBLE HIGH COURT, CANNOT NOW DECLINE THE SAME. IDEALLY, IT IS FOR THE CENTRAL BOARD OF DIRECT TAXE S TO MAKE THE POSITION CLEAR ONE WAY OR THE OTHER EITHER BY INITIATING SUITABLE AMENDMENT TO RULE 8D(2)(II) OR BY ADOPTING AN INTERPRETATION AS PER P LAIN WORDS OF THE SAID RULE, BUT EVEN ON THE FACE OF THINGS AS THEY ARE AT PRESE NT, IN OUR HUMBLE UNDERSTANDING, REVENUE AUTHORITIES CANNOT TAKE ONE STAND WHEN DEMONSTRATING LACK OF PERVERSITY, CAPRICE OR IRRAT IONALITY IN RULE 8D BEFORE HONBLE HIGH COURT, AND TAKE ANOTHER STAND WHEN IT COMES TO ACTUAL IMPLEMENTATION OF THE RULE IN REAL LIFE SITUATIONS. THEREFORE, EVEN AS WE ARE ALIVE TO THE FACT THAT THE STAND OF THE LEARNED DEP ARTMENTAL REPRESENTATIVE IS IN ACCORDANCE WITH THE STRICT WORDING OF RULE 8D(2) (II), WE HAVE TO HOLD THAT, FOR THE REASONS SET OUT ABOVE, THIS RIGID STAND CAN NOT BE APPLIED IN PRACTICE I.T.A. NO.: 460/DEL/2013 ASSESSMENT YEARS 2008-09 PAGE 8 OF 8 9. WHEN WE SO APPROACH THE MATTER, AND IN VIEW OF T HE FACT THAT THERE IS NO COMMON INTEREST EXPENDITURE IN THE PRESENT CASE AS PER T HE UNCONTROVERTED SUBMISSIONS OF THE ASSESSEE, NO PORTION OF INTEREST REALLY SURVIVES FO R ALLOCATION UNDER RULE 8D(2)(II). HOWEVER, AS THE LD. CIT(A) HAS GIVEN PARTIAL RELIEF AND THE ASSESSEE IS NOT IN APPEAL AGAINST THE SAME, ALL WE CAN HOLD IS THAT THE RELIEF GRANTE D BY THE LD. CIT(A) DOES NOT NEED TO BE DISTURBED AT THE INSTANCE OF THE REVENUE. WE THUS DECLINE TO INTERFERE IN THE MATTER IN THIS APPEAL BY THE ASSESSING OFFICER. 10. FOR THE REASONS SET OUT ABOVE, WE CONFIRM THE R ELIEF GRANTED BY THE LD. CIT(A) AND REJECT THE GRIEVANCE OF THE ASSESSING OFFICER. 11. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOU NCED IN THE OPEN COURT TODAY ON 23 RD MARCH, 2015. SD/- SD/- C.M. GARG PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NEW DELHI, THE 23 RD DAY OF MARCH, 2015 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI