DCIT, New Delhi V. M/s. Holtec Consulting Pvt. Ltd., New Delhi

ITA 4706/DEL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6383 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 08-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 03-09-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANGEETA GARG
• Assessee Lawyers: SATPAL SINGH
• Keywords: Depreciation; Bad and doubtful debts
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C , NEW DELHI) BEFORE SHRI U.B.S.BEDI, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO. 2584, 4706/DEL/2012 ASSESSMENT YEAR : 2008-09 & 2009-10 RESPECTIVELY ACIT, CIRCLE 12(1), VS. HOLTEC CONSULTING PVT. LTD ., NEW DELHI C BLOCK, 01-0103, IMPERIAL TOWER, COMMUNITY CENTRE, NARAINA VIHAR, NEW DELHI GIR / PAN:AAACH0031H I.T.A.NO. 1672 & 4563/DEL/2012 (ASSESSMENT YEAR 2008-09 & 2009-10 RESPECTIVELY) HOLTEC CONSULTING PVT. LTD., VS. ACIT, CIRCLE 12(1 ), C BLOCK, 01-0103, IMPERIAL TOWER, NEW DELHI COMMUNITY CENTRE, NARAINA VIHAR, NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : MS. SANGEETA GARG, CA RESPONDENT BY : SHRI SATPAL SINGH, SR. DR ORDER PER T.S. KAPOOR, AM: THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AS W ELL AS BY THE REVENUE FOR THE ASSESSMENT YEARS 2008-09 AND 2009-1 0 AGAINST ORDER OF LD. CIT(A) DATED 01.03.2012 & 27.06.2012 RESPECTIVELY. THESE APPEALS WERE HEAD TOGETHER, THEREFORE, COMMON CONSOLIDATED ORDER IS BEING PASSED 2. IN ASSESSMENT YEAR 2008-09 IN I.T.A.NO. 1672/DEL /2012, THE ASSESSEE IS AGGRIEVED WITH THE ACTION OF LD. CIT(A) BY WHICH HE HAD UPHELD THE ITA NO2584,1672,4563 & 4706./DEL/2012 2 DISALLOWANCE OF RS.1,05,02,874/- PAID TO DIRECTORS AS COMMISSION. IN THE SAME YEAR, IN I.T.A.NO. 2584/DEL/2012, THE REVENUE IS AGGRIEVED WITH THE ACTION OF LD. CIT(A) BY WHICH HE HAD DELETED ADDITI ON ON ACCOUNT OF DEPRECIATION ON COMPUTER PERIPHERALS AND FURTHER DE LETION OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF WRITING OFF OF ADVANCES AND REIMBURSABLE AMOUNTS. 3. IN ASSESSMENT YEAR 2009-10, VIDE I.T.A.NO. 4563/ DEL/2012, THE ASSESSEE IS AGGRIEVED WITH UPHOLDING OF DISALLOWANC E U/S 14A AMOUNTING TO RS.31,23,402/-. IN THE SAME YEAR I.E. 2009-10 THE REVENUE IS AGGRIEVED WITH THE ACTION OF LD. CIT(A) BY WHICH HE HAD DELETED TH E ADDITION ON ACCOUNT OF COMMISSION PAID TO DIRECTOR AMOUNTING TO RS.1,07,50 ,748/-. THE REVENUE IS FURTHER AGGRIEVED IN THIS YEAR BY THE ACTION OF LD. CIT(A) BY WHICH HE HAD DELETED A DISALLOWANCE OF RS.75,450/- MADE BY THE A SSESSING OFFICER INVOKING CLAUSE (II) OF RULE 8D (2) OF I.T. RULES. 4. WE FIRST TAKE UP THE APPEAL OF THE ASSESSEE IN I .T.A.NO. 1672/DEL/2012. LD. A.R. AT THE TIME OF HEARING SUB MITTED THAT THE ISSUE OF PAYMENT OF COMMISSION TO DIRECTOR WAS DECIDED BY TH E TRIBUNAL ORDER IN THE CASE OF THE ASSESSEE ITSELF FOR THE ASSESSMENT YEAR 2005-06 AND 2006-07. IN THIS RESPECT, OUR ATTENTION WAS INVITED TO PAPER BO OK AT PAGE 60-71. OUR SPECIFIC ATTENTION WAS INVITED TO PARA 17.3 17.5 AT PAGES 69-70. IT WAS FURTHER SUBMITTED THAT IN THE SUCCEEDING YEAR 2009- 10, LD. CIT(A) HAS ALSO ALREADY DELETED A SIMILAR ADDITION ON ACCOUNT OF CO MMISSION PAID TO DIRECTORS AND IN THIS RESPECT, OUR ATTENTION WAS IN VITED TO CIT(A)S ORDER DATED 27.06.2012 AND IT WAS FURTHER SUBMITTED THAT AGAINST THIS DELETION, THE REVENUE IS IN APPEAL IN I.T.A.NO. 4706/DEL/2012. ITA NO2584,1672,4563 & 4706./DEL/2012 3 5. LD. A.R. FURTHER INVITED OUR ATTENTION TO PAPER BOOK PAGE 8 WHERE COPY OF LETTER WRITTEN TO CIT(A) WAS PLACED . OUR SPECIFIC ATTENTION WAS INVITED TO GROUND NO.2 RELATING TO DISALLOWANCE OF COMMISSION ON WHICH SUBMISSIONS WERE MADE AS PER PAGE 9-13. LD. A.R. H EAVILY RELIED UPON THE SUBMISSIONS MADE BEFORE LD. CIT(A). IN VIEW OF TH E ABOVE, IT WAS SUBMITTED THAT APPEAL OF THE ASSESSEE IN ASSESSMENT YEAR 2008-09 BE ALLOWED AND APPEAL OF THE REVENUE IN ASSESSMENT YEAR 2009-1 0 ON SIMILAR FACTS BE DISMISSED. 6. MAKING ARGUMENTS IN ASSESSEES APPEAL IN I.T.A. NO. 4563/DEL/2012 IN ASSESSMENT YEAR 2009-10 REGARDING UPHOLDING OF D ISALLOWANCE U/S 14A, LD. A.R. INVITED OUR ATTENTION TO PAPER BOOK PAGE 5 WHEREIN BRIEF SYNOPSIS REGARDING DISALLOWANCE U/S 14A WAS PLACED. THE LD. A.R. SUBMITTED THAT THE ACTION OF LD. CIT(A) IN CONFIRMING THE DISALLOWANCE WAS NOT JUSTIFIED, AS PART OF THE AMOUNT OF INVESTMENTS WAS IN GROUP COMP ANIES AND LD. CIT(A), WITHOUT CONSIDERING THE ARGUMENTS HAD UPHELD THE AD DITION. IT WAS FURTHER SUBMITTED THAT INVESTMENT IN MUTUAL FUNDS AMOUNTING TO RS.65.54 CRORES INCLUDED INVESTMENTS EARNING INTEREST INCOME WHICH HOWEVER WERE RECEIVED IN THE FORM OF DIVIDENDS. IN THIS RESPECT, OUR ATT ENTION WAS INVITED TO PAPER BOOK DATED 21.02.2014 AND WE WERE TAKEN TO PAGES 37 -40 TO HIGHLIGHT THE BREAK-UP OF INVESTMENT IN VARIOUS SCHEMES OF MUTUAL FUNDS. IT WAS SUBMITTED THAT MOST OF THE INVESTMENTS IN MUTUAL FU ND WERE FIXED INCOME FUNDS WHEREIN, THE INCOME WAS DISTRIBUTED BY MUTUAL FUNDS IN THE FORM OF DIVIDEND THE NATURE OF WHICH IN FACT REMAINS AS INT EREST AS THESE WERE FIXED MATURITY PLANS AND DID NOT REQUIRE ANY EXPERTISE IN MAKING INVESTMENTS AND THEREFORE, ASSESSEE HAD NOT INCURRED ANY SPECIFIC E XPENDITURE TO EARN THE INCOME. IN VIEW OF THE ABOVE SUBMISSIONS, IT WAS SUBMITTED THAT LD. ITA NO2584,1672,4563 & 4706./DEL/2012 4 CIT(A) HAD NOT CONSIDERED THE SUBMISSIONS OF THE AS SESSEE IN ARRIVING AT THE CORRECT AMOUNT OF DISALLOWANCE. THE ASSESSEE SUBMI TTED THAT OUT OF THE TOTAL DISALLOWANCE OF RS.31,23,401/- THE LD. CIT(A) HAD G IVEN RELIEF OF RS.75,415/- ONLY WHICH WAS ON ACCOUNT OF INTEREST A S PER RULE 8D(2) OF THE ACT. ASSESSEE INVITED OUR ATTENTION TO I.T.A.NO. 4 705/DEL/2012 FILED BY THE REVENUE WHEREIN REVENUE HAD CHALLENGED ACTION OF LD . CIT(A) AS ONE OF THE GROUNDS OF APPEAL. LD. A.R. SUBMITTED THIS TH AT LD. CIT(A) ON THE BASIS OF FACTS AND CIRCUMSTANCES, HAD ARRIVED AT THE CONC LUSION THAT NO INTEREST BEARING FUNDS WERE UTILIZED BY THE ASSESSEE IN MAKI NG INVESTMENTS, THEREFORE, HE HAD RIGHTLY GIVEN THE RELIEF. 7. REPLYING TO THE ABOVE ARGUMENTS OF LD. A.R. IN R ESPECT OF ASSESSEES APPEAL IN I.T.A.NO. 1672/DEL/2012 LD. D.R. SUBMITTE D THAT COMMISSION PAID TO DIRECTORS WAS QUITE EXCESSIVE THE LD. D.R. THERE FORE, ASSESSING OFFICER HAD RIGHTLY MADE THE ADDITIONS. AS REGARDS THE ASSE SSEES APPEAL IN ASSESSMENT YEAR 2009-10 IN I.T.A.NO. 4563/DEL/2012, THE LD. D.R. SUBMITTED THAT LD. CIT(A) HAD ALREADY ALLOWED APPRO PRIATE RELIEF AGAINST WHICH REVENUE IS ALREADY IN APPEAL IN I.T.A.NO. 470 6/DEL/2012. 8. ARGUING REVENUES APPEAL IN ASSESSMENT YEAR 2009 -10 IN I.T.A.NO. 4706/DEL/2012, LD. D.R. SUBMITTED THAT PAYMENT OF C OMMISSION WAS QUITE HIGH AND THEREFORE WAS RIGHTLY DISALLOWED BY THE AS SESSING OFFICER AND LD. CIT(A) WITHOUT CONSIDERING THE FACTS OF THE PRESENT CASE, FOLLOWED THE EARLIER ORDER OF THE TRIBUNAL IN THE CASE OF ASSESSEE ITSEL F IN ASSESSMENT YEAR 2005- 06 & 2006-07. REGARDING 2 ND GROUND, LD. D.R. SUBMITTED THAT LD. CIT(A) WRONGLY ALLOWED RELIEF OF RS.75,415/- AS THERE WAS INTEREST BEARING FUNDS ALSO WHICH WERE USED FOR MAKING INVESTMENTS. ITA NO2584,1672,4563 & 4706./DEL/2012 5 9. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THRO UGH THE MATERIAL PLACED ON RECORD. WE FIRST TAKE UP ASSESSMENT YEAR 2008-0 9. WE FIND THAT THE ASSESSEES APPEAL IN I.T.A.NO. 1672/DEL/2012 REGARD ING COMMISSION PAID TO DIRECTORS IS COVERED IN FAVOUR OF THE ASSESSEE BY T HE TRIBUNAL ORDER IN THE CASE OF THE ASSESSEE ITSELF AS PLACED IN PAPER BOOK PAGE 60-71. THOUGH IN THE YEAR 2005-06 & 2006-07, THE PAYMENT OF COMMISSI ON RELATED TO TWO DIRECTORS ONLY AS COMPARED TO THE PRESENT CASES WHE REIN THE PAYMENT OF COMMISSION RELATES TO FOUR DIRECTORS. THE FIRST TW O DIRECTORS NAMELY SHRI UMESH SRIVASTAVA AND MS. SUMAN SRIVASTAVA ARE HOLDI NG SHARES TO THE EXTENT OF 19.8% AND 122.4% RESPECTIVELY. THESE DIR ECTORS ARE ENGINEERS AND MANAGEMENT GRADUATES AND ARE HAVING EXPERIENCE OF 5 0 YEARS AND 15 YEARS RESPECTIVELY. IN RESPECT OF THESE TWO DIRECTORS, T HE TRIBUNAL IN ASSESSMENT YEARS 2005-06 AND 2006-07, HAD HELD IN FAVOUR OF TH E ASSESSEE. BESIDES THE ABOVE TRIBUNAL ORDER IN THE EARLIER YEARS, A NUMBER OF JUDGEMENTS HAS BEEN RELIED UPON BY THE LD. A.R. BEFORE LD. CIT(A) WHICH HOLD THAT PAYMENT TO DIRECTORS IN THE FORM OF COMMISSION IS COVERED BY T HE DEFINITION OF REMUNERATION. THE HON'BLE SUPREME COURT IN THE CA SE OF GESTETNER DUPLICATORS LTD. VS CIT IN W.P. NO.117/01 HAS HELD THAT COMMISSION PAID AT A FIXED PERCENTAGE ON THE TURNOVER IS NOTHING BUT P AYMENT AS SALARY. THE HON'BLE APEX COURT WHILE DELIVERING THIS JUDGEMENT, OPINED THAT THE COMMISSION PAID BY THE ASSESSEE WOULD CLEARLY FALL WITHIN THE EXPRESSION SALARY. SIMILARLY, HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS ROHIT MILLS LTD. 219 ITR 228 HELD THAT THE COMMISSION PAI D TO DIRECTORS IS DISTINCTLY REMUNERATION PAID FOR THE SERVICES RENDE RED BY HIM. EVEN IF IT IS NOT COVERED BY THE DEFINITION OF REMUNERATION, IT W OULD BE COVERED BY ANY BENEFIT RESULTING DIRECTLY OR INDIRECTLY TO SUCH DI RECTOR AT THE COST OF THE ITA NO2584,1672,4563 & 4706./DEL/2012 6 COMPANY. IN VIEW OF THE ABOVE JUDICIAL PRECEDENTS, WE HOLD THAT THE DISALLOWANCE OF COMMISSION WAS NOT WARRANTED. THER EFORE, GROUND NO.1 IN ASSESSMENT YEAR 2008-09 IN I.T.A.NO. 1672/DEL/2012 IS ALLOWED WHEREAS GROUND NO.1 OF REVENUES APPEAL IN ASSESSMENT YEAR 2009-10 IN I.T.A.NO. 4706/DEL/2012 IS DISMISSED. 10. AS REGARDS I.T.A.NO. 2584/DEL/2012, LD. CIT(A) HAS DELETED THE ADDITION BY HOLDING AS UNDER: DISALLOWANCE OF RS.7,07,412/- ON ACCOUNT OF DEPREC IATION OF COMPUTER PERIPHERALS, PRINTER AND UPS: WITH REGARD TO THE ABOVE ISSUE THE APPELLANT MADE T HE FOLLOWING SUBMISSION THE GIST OF WHICH IS AS UNDER: .THE APPELLANT COMPANY HAS CLAIMED DEPRECIATION A T THE RATE OF 60% ON ADDITION OF COMPUTER PERIPHERALS, PRINTERS, UPS ETC. ALL THESE ITEMS AS CLAIMED FORM AN INTEGRAL PART OF THE COMPU TER, '----- UPS/ SWITCHES/ CABLE/ PORT/ CONNECTORS ETC. CAN BE USED ONLY WITH THE COMPUTERS AND CANNOT BE USED ON STANDALONE BASI S DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS/ A DETAILED LI ST OF THE ADDITIONS MADE TO COMPUTERS ON WHICH 60% DEPRECIATION WAS CLA IMED BY THE ASSESSEE COMPANY WAS PROVIDED TO THE LO AO (COPY EN CLOSED AS ANNEXURE-9 ) IT IS A WELL SETTLED LAW NOW THAT THE WORD COMPUTER HAS ,TO BE READ AS COMPUTER SYSTEM COMPRISING OF THE AL L CONNECTING DEVICES WHICH ARE ESSENTIAL PARTS OF THE COMPUTERS. IN THE LIGHT OF JUDICIAL PRONOUNCEMENT OF ACIT VIS. CONTAINER CORPO RATION/ ITAT DELHI BENCH AND ITO VS. SAMIRAN MAJUMDAR/ ITAT KOLK ATA BENCH (COPY OF JUDGEMENTS ARE ATTACHED AS PER ANNEXURE 10 & 11).------H 10. I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE APPELLANT AND HAVE GONE THROUGH THE VARIOUS JUDICIAL PRECEDENTS R ELIED UPON BY THE APPELLANT. SINCE THE EXPENDITURE IS WITH REGARD TO THE COMPUTER PERIPHERALS, PRINTERS, UPS WHICH CAN NOT BE USED ST AND ALONE, THEREFORE, IN VIEW OF THE DECISION RELIED UPON BY T HE APPELLANT, I AGREE THAT IN THE FACTS AND CIRCUMSTANCES OF THE APPELLAN T'S CASE, HE IS ENTITLED FOR DEPRECIATION @ 60% . 11. DISALLOWANCE OF RS. 16,60,818 ON ACCOUNT OF A DVANCES & REIMBURSABLES WRITTEN OFF. ITA NO2584,1672,4563 & 4706./DEL/2012 7 WITH REGARD TO THE ABOVE ISSUE THE APPELLANT MADE T HE SUBMISSIONS, THE GIST OF WHICH IS AS UNDER: '-----DURING THE ASSESSMENT YEAR 2008-09/ ASSESSEE HAS DEBITED ITS PROFIT AND LOSS ACCOUNT WITH BAD DEBTS AMOUNTING TO RS. 2,03,56,466 OUT OF RS.16,60,818 HAS BEEN DISALLOWED BY THE AO. THE ASSESSEE COMPANY IS BASICALLY ENGAGED IN THE BU SINESS OF PROVIDING ENGINEERING AND MANAGEMENT SERVICES IN IN DIA AND ABROAD. THE INVOICES IN THE NAME OF CLIENTS ARE RAISED AND CREDITED TO PROFIT AND LOSS ACCOUNT IN THE YEAR IN WHICH SUCH INVOICES ARE RAISED. IN SOME CASES ENTIRE CLAIMS ARE NOT APPROVED BY THE CL IENT CITING VARIOUS REASONS AND DESPITE MANY EFFORTS MADE BY THE COMPAN Y. '-----DURING ASSESSMENT PROCEEDINGS THE LD. AO WAS PROVIDED WITH DETAILS OF ADVANCES, AS EXPLAINED TO AO THE ADVANCE S WRITTEN OFF CONSIST OF TWO PARTS, FEES AND REIMBURSABLE. (AS PE R ANNEXURE 12) FEES ARE CONSIDERATION FOR SERVICES PROVIDED AND RE IMBURSABLE ARE OUT OF POCKET EXPENSES. WHENEVER INVOICES ARE RAISED THEY ARE RAISED EITHER SEPARATELY OR JOINTLY. THE LD. AO HAS CONSIDERED OUR SUBMISSION I N CASE OF FEES PART BUT HAS MADE ADDITION ON PART OF REIMBURSABLE. WHER EAS, THE NATURE OF BOTH THE COMPONENTS ARE EXACTLY SIMILAR. THE ASSESSEE HAS BEEN CONSISTENTLY BEEN CARRYING OF THE SAME BUSINESS SINCE 1967 AND THE AMOUNT SO WRITTEN OFF HAS BEEN C ONSIDERED IN EARLIER YEARS AS INCOME OF THE ASSESSEE AFTER LOT O F FOLLOW UPS AND PERSUASION WHEN THE ASSESS COMPANY FELT THAT THE AM OUNT IS NOT LIKELY TO BE RECOVERED THE COMPANY HAS DECIDED TO WRITE TH E SAME OFF IN ITS BOOKS OF ACCOUNTS. THE AO HAS COMPLETELY MISUNDERST OOD THE CASE AND DISALLOWED THE BAD DEBTS SO WRITTEN OFF FOR THE REIMBURSABLE EXPENSES INCURRED BY THE ASSESSEE COMPANY WHICH HAS BEEN TAKEN INTO INCOME IN PREVIOUS YEARS. IN ORDER TO DIFFERENTIATE THE AMOUNT OF FEE AND THE EXPENSE THE COMPANY RECORDS THE 2 SEPARATEL Y THOUGH THE SAME IS CONSIDERED TO BE THE INCOME OF THE ASSESSEE IN THE YEAR OF RAISING OF INVOICES. THE AO ON ONE HAND HAS ALLOWED FEES WRITTEN OFF WHILE ON THE OTHER HE HAS DISALLOWED THE AMOUNT REC OVERABLE FROM THE CLIENTS ON ACCOUNT OF EXPENSES INCURRED. IN THE LIGHT OF JUDGEMENT OF TRF LIMITED VS. CIT, A S DECIDED BY HON'BLE SUPREME COURT, IN WHICH THE APEX COURT HAS HELD THAT ITA NO2584,1672,4563 & 4706./DEL/2012 8 'THIS POSITION IN LAW IS WELL-SETTLED. AFTER 1STAPR IL, 1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DE BT, IN FACT, HAS BECOME IRRECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE' (AS PER ANNEXURE 13).--- 12. I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE APPELLANT AND HAVE GONE THROUGH THE JUDICIAL PRECEDENTS RELIED UP ON BY THE APPELLANT. IT IS SEEN THAT THE APPELLANT HAS CREDIT ED BOTH THE FEES AS WELL AS OUT OF POCKET EXPENSES TO THE PROFIT AND LO SS ACCOUNT, HENCE ASSESSING OFFICERS OBSERVATION IS NOT CORRECT THAT DEBT HAS NOT BEEN TAKEN INTO ACCOUNT WHILE COMPUTING THE INCOME. FUR THER IN VIEW OF THE ACCOUNTING TREATMENT REGULARLY FOLLOWED BY THE APPELLANT AND BY RELYING ON THE JUDGEMENT OF APEX COURT IN THE CASE OF TRF LIMITED VS CIT (230 CTR 14) (S.C.), THE CLAIMS OF BAD DEBT IS ALLOWED. 11. WE ARE IN AGREEMENT WITH THE FINDINGS OF LD. CI T(A) IN RESPECT OF DEPRECIATION ON COMPUTER PERIPHERALS & WRITE OFF OF DEBTS, THEREFORE, REVENUES APPEAL IN I.T.A.NO. 2584/DEL/2012 IS DISM ISSED. 12. AS REGARDS GROUND NO.1 IN I.T.A.NO. 4563/DEL/20 12, AND GROUND NO.2 IN I.T.A.NO. 4706/DEL/2012 WITH REGARD TO UPHOLDING OF PARTIAL DISALLOWANCE U/S 14A, WE FIND THAT LD. CIT(A) HAS NOT CONSIDERED THE SUBMISSIONS OF THE ASSESSEE REGARDING BREAK-UP OF INVESTMENT WHICH INC LUDED INVESTMENT IN GROUP COMPANIES AND ALSO HAS NOT CONSIDERED THAT A MAJOR PART OF INVESTMENT IN MUTUAL FUNDS WAS IN DEBT RELATED INVESTMENTS WHE RE THE INVESTMENTS GENERALLY EARN FIXED INCOME BUT DISTRIBUTION OF INC OME IS IN THE FORM OF DIVIDENDS. WE ARE OF THE OPINION THAT FIXED MATURI TY PLANS OFFERED BY MUTUAL FUNDS DEFINITELY REQUIRE MUCH LESS PROFESSIONAL EXP ERTISE AS COMPARED FOR MAKING INVESTMENTS IN EQUITY RELATED SCHEMES AND TH EREFORE, LESS EXPENDITURE IS INVOLVED IN MANAGING SUCH SCHEMES. M OREOVER BEFORE UPHOLDING PARTIAL DISALLOWANCE U/S 14A, LD. CIT(A) SHOULD HAVE CONSIDERED THE SUBMISSIONS OF ASSESSEE THAT A PART OF INVESTME NTS WERE NOT FOR EARNING DIVIDENDS BUT WERE STRATEGIC INVESTMENTS. IN VIEW OF THE ABOVE, WE ARE OF ITA NO2584,1672,4563 & 4706./DEL/2012 9 THE OPINION THAT THE ISSUE OF DISALLOWANCE BE READJ UDICATED BY THE ASSESSING OFFICER AND THE ASSESSING OFFICER SHOULD DECIDE THE DISALLOWANCE ON THE BASIS OF HIS OBJECTIVE FINDINGS AFTER GIVING A REAS ONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. IN VIEW OF THE ABOVE, THE APPEAL OF THE ASSESSEE IN I.T.A.NO.4563/DEL/2012 IS ALLOWED FOR STATISTICAL P URPOSES AND THE REVENUES APPEAL IN I.T.A.NO. 4706/DEL/2012 IS PART LY ALLOWED FOR STATISTICAL PURPOSES. 12. IN NUTSHELL DEPARTMENTS APPEAL IN I.T.A.NO. 2584/D EL/2012 IS DISMISSED WHILE I.T.A.NO. 4706/DEL/2012 IS PARTLY A LLOWED FOR STATISTICAL PURPOSE. APPEALS OF THE ASSESSEE IN I.T.A.NO. 1672 /DEL/2012 IS ALLOWED WHEREAS I.T.A.NO. 4563/DEL/2012 IS ALLOWED FOR STAT ISTICAL PURPOSES. 13. ORDER PRONOUNCED IN THE OPEN COURT ON 07 TH JULY, 2014. SD./- SD./- (U.B.S.BEDI) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 07 TH JULY, 2014 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). ITA NO2584,1672,4563 & 4706./DEL/2012 10 DATE OF HEARING DATE OF DICTATION DATE OF TYPING DATE OF ORDER SIGNED BY BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET & SENT TO THE BENCH CONCERNED.