Shri Lalit Kumar Poddar, New Delhi V. ACIT, New Delhi

ITA 5197/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58923 (ITAT-DELHI)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 22-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Keywords: Earning of tax free income; Retrospective amendment
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `D : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.5197/DEL./2011 (ASSESSMENT YEAR : 2007-08) SHRI LALIT KUMAR PODDAR, VS. ACIT, CIRCLE 5(1), E-524, GREATER KAILASH-II, NEW DELHI NEW DELHI. (PAN/GIR NO.AHZPP0556G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PREM LATA BANSAL, ADV. REVENUE BY : MS. Y. KAKKAR, 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)- VIII, NEW DELHI 12.09.2011, RELEVANT TO ASSESSMENT YEAR 2007-08 WHEREIN FOLLOWING FOUR EFFECTIVE GROUNDS HAVE BEEN RAISED AS UNDER: 1. THAT THE CIT(A) HAS ERRED IN CONFIRMING THE ORD ER PASSED BY ASSESSING OFFICER WITH RESPECT TO INVOKING OF PROVISIONS OF S ECTION 14A OF THE ACT AND THEREBY DISALLOWING A SUM OF RS.15,03,031/- U/S 14A OF THE I.T. ACT, 1961 R/W RULE 8D OF INCOME TAX RULES. 2. THAT THE CIT(A) HAS ERRED IN MAKING THE DISALLOW ANCE U/S 14A AS PER RULE 8D OF THE INCOME TAX RULES WHEN THE PROVISIONS OF R ULE 8D WERE NOT APPLICABLE TO ASSESSMENT YEAR 2007-08 AND THEREFORE, SUCH DISA LLOWANCE HAS TO BE DELETED. 3. THAT THE CIT(A) HAS ERRED IN DISALLOWING A SUM O F RS.15,03,031/- U/S 14A OF THE I.T. ACT, 1961 R/W RULE 8D, WHICH IS HIGHLY UNJUSTIFIED AND ARBITRARY IGNORING THE FACT THAT THE ASSESSEE HAD NOT RECEIVE D ANY DIVIDEND FROM INVESTMENT AND THE DIVIDEND WAS RECEIVED ONLY FROM TRADING STO CK. 4. THAT THE CIT(A) HAS ERRED IN CONFIRMING THE DISA LLOWANCE U/S 14A OF THE ACT IGNORING THE MATERIAL FACT THAT NO NEXUS OF EXP ENSES INCURRED BY THE ASSESSEE WITH RESPECT TO TAX-FREE EARNING HAD BEEN ESTABLISH ED. I.T.A. NO.5197/DEL./2011 (A.Y. : 2007-08) 2 2. THE ISSUE IN THIS APPEAL RELATES TO DISALLOWANCE OF RS.15,03,031/- MADE U/S 14A READ WITH RULE 8D OF THE I.T. RULES, 1962. A PERUS AL OF THE ASSESSMENT ORDER REVEALS THAT DISALLOWANCE IN QUESTION HAS BEEN MADE BY THE ASSES SING OFFICER OBSERVING THAT FROM THE BALANCE SHEET OF THE ASSESSEE, IT WAS NOTICED T HAT THE ASSESSEE HAS MADE INVESTMENT IN SHARES OF DIFFERENT COMPANIES. DURING THE YEAR, TH E ASSESSEE HAS RECEIVED DIVIDEND INCOME FROM THE SAID COMPANIES, WHICH SHE HAS CLAIM ED AS EXEMPT. AT THE SAME TIME, THE ASSESSEE HAS CLAIMED EXPENSES OF RS.27,26,953/- IN RESPECT OF INTEREST ON LOAN. THEREFORE, THE DISALLOWANCE IS REQUIRED TO BE MADE U/S 14A OF THE ACT IN RESPECT OF THE CLAIM OF EXPENSES ON ACCOUNT OF INTEREST. 3. ASSESSEE TOOK UP THE MATTER IN APPEAL AND IT WAS SUBMITTED BEFORE THE FIRST APPELLATE AUTHORITY THAT THE DISALLOWANCE IN QUESTI ON IS NOT SUSTAINABLE. IT WAS ARGUED THAT THE ASSESSEE WAS INVOLVED IN PURCHASE AND SALE OF S HARES THROUGH RECOGNIZED STOCK EXCHANGE AND WAS NOT ENGAGED IN INVESTMENT OF SHARE S. FURTHER, DIVIDEND OF RS.1,38,460/- WAS RECEIVED IN RESPECT OF TRADING IN SHARES AND THIS WAS ADDITIONAL INCOME EARNED DURING THE COURSE OF BUSINESS, IT WAS SUBMIT TED THAT NO DIRECT OR INDIRECT EXPENSES WERE INCURRED BY THE ASSESSEE IN CONNECTION WITH EA RNING OF THE DIVIDEND INCOME. THEREFORE, IT WAS ARGUED BEFORE FIRST APPELLATE AUT HORITY THAT ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE DISALLOWANCE IN QUESTION. FURTHER, ELABORATING THE ARGUMENTS, THE ASSESSEE HAS MADE VARIOUS WRITTEN ARGUMENTS FROM PA RA.8.2(A) TO (N) AS RECORDED BY LD.CIT(A). 4. THE LD.CIT(A) WHILE CONSIDERING BUT NOT ACCEPTIN G THE PLEA OF THE ASSESSEE HAS CONCLUDED TO CONFIRM THE DISALLOWANCE MADE BY THE A SSESSING OFFICER AS PER PARA.8.3 OF HIS ORDER WHICH READS AS UNDER: I.T.A. NO.5197/DEL./2011 (A.Y. : 2007-08) 3 8.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MA DE ON BEHALF OF THE APPELLANT AND THE FINDINGS RECORDED BY THE ASSESSIN G OFFICER. ON CONSIDERATION, I FIND THAT APART FROM TRADING STOCK OF RS.5153132/-, THE APPELLANT HAD AN INVESTMENT OF RS.7539025/- IN EQUITY SHARES OF COMP ANIES, ON 31.03.2007. THEREFORE, THE CLAIM OF THE APPELLANT THAT HE HAS N OT ENGAGED HIMSELF IN INVESTMENT ACTIVITY AND WAS ENGAGED ONLY IN TRADING OF SHARES IS FACTUALLY INCORRECT. IT HAS TO BE APPRECIATED THAT INVESTMEN T IN EQUITY SHARES HAS TO BE EXPLAINED WITH EVIDENCE THAT THE SAME WAS MADE OUT OF SURPLUS/INTEREST FREE FUNDS. HOWEVER, ADMITTEDLY, NO SUCH EXPLANATION HAS BEEN F ILED ON BEHALF OF THE APPELLANT. FURTHER, A PERUSAL OF PROVISIONS OF SEC TION 14A REVEALS THAT THE DISALLOWANCE IN QUESTION HAS TO BE MADE IF THE APPE LLANT HAS INCURRED ANY EXPENDITURE IN RELATION TO THE EARNING OF EXEMPT IN COME. ADMITTEDLY, THE APPELLANT HAD DIVIDEND INCOME OF RS.135460/- WHICH HAS BEEN CLAIMED AS EXEMPT IN THE COMPUTATION OF INCOME FILED WITH THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THEREFORE, THE PROVISION S OF SECTION 14A ARE APPLICABLE IN THE CASE OF THE APPELLANT. NOW THE ISSUE IS WHE THER THE APPELLANT HAS INCURRED ANY EXPENDITURE IN RELATION TO THE INVESTMENT ACTIV ITY. AS STATED EARLIER, THE APPELLANT HAS NOT FURNISHED ANY MATERIAL TO SUGGEST THAT THE INVESTMENT OF RS.7539025/- IN EQUITY SHARES WAS MADE OUT OF INTER EST FREE FUNDS. THEREFORE, IT CANNOT BE ACCEPTED THAT NO EXPENDITURE IN RELATION TO INVESTMENT ACTIVITY WAS INCURRED BY THE APPELLANT. AS REGARDS, THE CLAIM O F THE APPELLANT THAT THE DIVIDEND INCOME HAS BEEN RECEIVED BY THE ASSESSEE INCIDENTAL LY TO ITS MAIN BUSINESS ACTIVITY OF SALE/PURCHASE OF SHARES AND THEREFORE, NO DISALL OWANCE U/S 14A OF THE ACT WAS CALLED FOR, ON CONSIDERATION, THE SAME DISTINCTION BETWEEN THE DIVIDEND INCOME EARNED WITH REFERENCE TO SHARES HELD AS INVESTMENT OR THE SHARES HELD AS STOCK IN TRADE. WHAT IS MATERIAL IS WHETHER THERE IS ANY EX EMPT INCOME AND EXPENDITURE INCURRED IN RELATION THERETO. THE APPELLANT HAS NO T DISPUTED THE FACT THAT ON THE DATE OF ISSUE OF DIVIDEND WARRANTS, HE WAS THE OWNE R OF THE ASSETS, NAMELY, SHARES IN RELATION TO WHICH THE DIVIDEND WAS DECLARED. TH EREFORE, I DO NOT FIND ANY INFIRMITY IN THE ACTION OF THE ASSESSING OFFICER AN D THE DISALLOWANCE IS BEING SUSTAINED. 5. STILL AGGRIEVED, ASSESSEE IS IN FURTHER APPEAL A ND LD.COUNSEL FOR THE ASSESSEE WHILE RELYING UPON HONBLE DELHI HIGH COURT DECISION IN T HE CASE OF MAXOPP INVESTMENT LTD. AND OTHERS VS. CIT, NEW DELHI AND OTHERS, DATED 18 .11.2011 AND ANOTHER DECISION OF DELHI HIGH COURT IN THE CASE OF CIT VS. SUN INVESTM ENTS PVT. LTD. DECIDED ON 2.12.2011 AND WHILE REFERRING TO VARIOUS OBSERVATIONS AND FIN DINGS MADE IN THE SAID JUDGMENTS IT WAS PLEADED FOR SETTING ASIDE THE ORDERS OF THE AUT HORITIES BELOW AND RESTORING THE MATTER I.T.A. NO.5197/DEL./2011 (A.Y. : 2007-08) 4 BACK ON THE FILE OF THE ASSESSING OFFICER FOR DECID ING IT DE NOVO IN THE LIGHT OF THE JURISDICTIONAL HIGH COURT DECISION. 6. LD.DR STRONGLY OPPOSED THE MOVE OF THE ASSESSEE S LD.COUNSEL AND PLEADED THAT BOTH THE JUDGMENTS RELIED UPON BY THE LD.COUNSEL FO R THE ASSESSEE ARE IN FACT SUPPORTIVE OF THE ORDER OF THE CIT(A) AND BY REFERRING TO CERT AIN OBSERVATIONS AND CONCLUSIONS OF THESE JUDGMENTS, IT WAS PLEADED FOR CONFIRMATION OF THE IMPUGNED 7. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MAT ERIAL ON RECORD AS WELL AS PRECEDENTS RELIED UPON BY THE LD.COUNSEL FOR THE AS SESSEE AND FIND THAT LATEST JURISDICTIONAL HIGH COURT JUDGMENT IN I.T.A. NO.687 /2009 AND OTHERS IN THE CASE OF MAXOPP INVESTMENT LTD. VS. CIT & OTHERS DATED 18.11 .2011 HAS DISCUSSED AND CONCLUDED FOR THE PERIOD PRIOR TO ASSESSMENT YEAR 2008-09 FRO M PARAS.35 TO 43 OF THE SAID JUDGMENTS AS UNDER: 35. WE ARE OF THE VIEW THAT RULE 8D WOULD OPERATE PROSPECTIVELY. WE AGREE WITH THE SUBMISSIONS MADE BY DR RAKESH GUPTA THAT I F THE SAID RULE WERE TO HAVE RETROSPECTIVE EFFECT, NOTHING PREVENTED THE CENTRAL BOARD OF DIRECT TAXES FROM SAYING SO, PARTICULARLY, IN VIEW OF THE FACT THAT I T HAD THE POWER TO MAKE A RULE RETROSPECTIVE BY VIRTUE OF SECTION 295(4) OF THE SA ID ACT. INSTEAD OF MAKING RULE 8D RETROSPECTIVE, CLAUSE 1(2) OF THE INCOME-TAX (FI FTH AMENDMENT) RULES, 2008 MADE IT CLEAR THAT THE RULES WOULD COME INTO FORCE FROM THE DATE OF THEIR PUBLICATION IN THE OFFICIAL GAZETTE. IT IS, THEREFO RE, CLEAR THAT RULE 8D, WHICH WAS INTRODUCED BY VIRTUE OF THE NOTIFICATION NO.45/2008 DATED 24.03.2008, WAS PROSPECTIVE IN OPERATION AND CANNOT BE REGARDED AS BEING RETROSPECTIVE. WE MAY ALSO POINT OUT THAT WE HAVE HAD THE BENEFIT OF THE DECISION OF THE BOMBAY HIGH COURT IN GODREJ AND BOYCE MFG. CO. LTD V DCIT: (201 0) 328 1TR 81 (BOM), WHEREIN IT HAS, INTER ALIA, BEEN HELD THAT THE PROV ISIONS OF RULE 8D OF THE SAID RULES HAS PROSPECTIVE EFFECT AND SHALL APPLY WITH E FFECT FROM ASSESSMENT YEAR 20D8-09 ONWARDS. 36. INSOFAR AS SUB-SECTIONS (2) AND (3) OF SECTION 14A ARE CONCERNED, THEY HAVE ALSO BEEN INTRODUCED BY VIRTUE OF THE FINANCE ACT, 2006 WITH EFFECT FROM 01.04.2007. THIS IS APPARENT, FIRST OF ALL, FROM TH E NOTES ON CLAUSES OF THE FINANCE BILL, 2006 [REPORTED IN 281 ITR (ST) AT PAGES 139-1 40]. THE SAID NOTES ON I.T.A. NO.5197/DEL./2011 (A.Y. : 2007-08) 5 CLAUSES REFERS TO CLAUSE 7 OF THE BILL WHICH HAD SO UGHT TO AMEND SECTION 14A OF THE SAID ACT. IT IS SPECIFICALLY MENTIONED IN THE S AID NOTES ON CLAUSES THAT:- 'THIS AMENDMENT WILL TAKE EFFECT FROM 1 SL APRIL, 2 007 AND WILL, ACCORDINGLY, APPLY IN RELATION TO THE ASSESSMENT YE AR 2007-08 AND SUBSEQUENT YEARS.' 37. FURTHERMORE, IN THE MEMORANDUM EXPLAINING THE PROVISIONS IN THE FINANCE BILL, 2006 [281 ITR (ST) AT PAGES 281-281], IT IS O NCE AGAIN STATED WITH REFERENCE TO CLAUSE 7 WHICH PERTAINS TO THE AMENDMENT TO SECT ION 14A OF THE SAID ACT THAT:- 'THIS AMENDMENT WILL TAKE EFFECT FROM 1 SL APRIL, 2 007 AND WILL, ACCORDINGLY, APPLY IN RELATION TO THE ASSESSMENT YE AR 2007-08 AND SUBSEQUENT YEARS.' 38. WE MAY ALSO REFER TO THE CBDT CIRCULAR NO. 14/ 2006 DATED 28.12.2006 AND TO PARAGRAPHS 11 TO 11.3 THEREOF. PARAGRAPH 11 DEALT WITH THE METHOD FOR ALLOCATING EXPENDITURE IN RELATION TO EXEMPT INCOME AND PARAGRAPHS 11.1 AND 11.2 EXPLAINED THE BASIS AND LOGIC BEHIND THE INTRODUCTI ON OF SUB-SECTION (2) OF SECTION 14A OF THE SAID ACT. PARAGRAPH 1 (3 SPECIFICALLY PR OVIDED FOR APPLICABILITY OF THE PROVISIONS OF SUB-SECTION (2) AND IT CLEARLY INDICA TED THAT IT WOULD BE APPLICABLE 'FROM THE ASSESSMENT YEAR 2007-08 ONWARDS'. 39. IT IS, THEREFORE, CLEAR THAT SUB-SECTIONS (2) A ND (3) OF SECTION 14A WERE INTRODUCED WITH PROSPECTIVE EFFECT FROM THE ASSESSM ENT YEAR 2007-08 ONWARDS. HOWEVER, SUB-SECTION(G) OF SECTION 14A REMAINED AN EMPTY SHELL UNTIL T~ INTRODUCTION OF RULE 8D ON 24.03.2008 WHICH GAVE CO NTENT TO THE EXPRESSION 'SUCH METHOD AS MAY BE PRESCRIBED' APPEARING IN SEC TION 14A(2) OF THE SAID ACT. 40. FROM THE ABOVE DISCUSSION, IT IS CLEAR THAT, IN EFFECT, THE PROVISIONS OF SUB-SECTIONS (2) AND (32 OF SECTION 14A WOULD BE WO RKABLE ONLY WITH EFFECT FROM THE DATE OF INTRODUCTION OF RULE 8D. THIS IS SO BEC AUSE PRIOR TO THAT DATE, THERE WAS NO PRESCRIBED METHOD AND SUB-SECTIONS (2) AND (3) O F SECTION 14A REMAINED UNWORKABLE. HOW IS SECTION 14A TO BE WORKED FOR THE PERIOD PRIO R TO THE INTRODUCTION OF RULE 8D? 41. SUB-SECTION (2) OF SECTION 14A, AS WE HAVE SEE N, STIPULATES THAT THE ASSESSING OFFICER SHALL DETERMINE THE AMOUNT OF EXP ENDITURE INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INC OME 'IN ACCORDANCE WITH SUCH METHOD AS MAY BE PRESCRIBED'. OF COURSE, THIS DETER MINATION CAN ONLY BE UNDERTAKEN IF THE ASSESSING OFFICER IS NOT SATISFIE D WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF SUCH EXPENDITUR E. THIS PART OF SECTION 14A(2) WHICH EXPLICITLY REQUIRES THE FULFILLMENT OF A COND ITION PRECEDENT IS ALSO IMPLICIT IN SECTION 14A(L ) [AS IT NOW STANDS] AS ALSO IN IT S INITIAL AVATAR AS SECTION 14A. IT IS I.T.A. NO.5197/DEL./2011 (A.Y. : 2007-08) 6 ONLY THE PRESCRIPTION WITH REGARD TO THE METHOD OF DETERMINING SUCH EXPENDITURE WHICH IS NEW AND WHICH WILL OPERATE PROSPECTIVELY. IN OTHER WORDS, SECTION 14A, EVEN PRIOR TO THE INTRODUCTION OF SUB-SECTIONS (2) & (3) WOULD REQUIRE THE ASSESSING OFFICER TO FIRST REJECT THE CLAIM OF THE ASSESSEE WITH REGARD TO THE EXTENT OF SUCH EXPENDITURE AND SUCH REJECTION MUST BE FOR DISCLOSED COGENT REASONS. IT IS THEN THAT THE QUESTION OF DETERMINATION OF SUCH EXP ENDITURE BY THE ASSESSING OFFICER WOULD ARISE. THE REQUIREMENT OF ADOPTING A SPECIFIC METHOD OF DETERMINING SUCH EXPENDITURE HAS BEEN INTRODUCED BY VIRTUE OF S UB-SECTION (2) OF SECTION 14A. PRIOR TO THAT, THE ASSESSING WAS FREE TO ADOPT ANY REASONABLE AND ACCEPTABLE METHOD. 42. THUS, THE FACT THAT WE HAVE HELD THAT SUB-SECTI ONS (2) & (3) OF SECTION 14A AND RULE 8D WOULD OPERATE PROSPECTIVELY (AND, NOT R ETROSPECTIVELY) DOES NOT MEAN THAT THE ASSESSING OFFICER IS NOT TO SATISFY HIMSEL F WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE WITH REGARD TO SUCH EXPENDITURE. IF HE IS SATISFIED THAT THE ASSESSEE HAS CORRECTLY REFLECTED THE AMOUNT OF SUCH EXPENDIT URE, HE HAS TO DO NOTHING FURTHER. ON THE OTHER HAND, IF HE IS SATISFIED ON A N OBJECTIVE ANALYSIS AND FOR COGENT REASONS THAT THE AMOUNT OF SUCH EXPENDITURE AS CLAIMED BY THE ASSESSEE IS NOT CORRECT, HE IS REQUIRED TO DETERMINE THE AMOUNT OF SUCH EXPENDITURE ON THE BASIS OF A REASONABLE AND ACCEPTABLE METHOD' OF APP ORTIONMENT. IT WOULD BE APPROPRIATE TO RECALL THE WORDS OF THE SUPREME COUR T IN WALFORT (SUPRA) TO THE FOLLOWING EFFECT:- 'THE THEORY OF APPORTIONMENT OF EXPENDITURE BETWEEN TAXABLE AND NON- TAXABLE HAS, IN PRINCIPLE, BEEN NOW WIDENED UNDER S ECTION 14 A. SO, EVEN FOR THE PRE-RULE8D PERIOD, WHENEVER THE IS SUE OF SECTION 14A ARISES BEFORE AN ASSESSING OFFICER, HE HAS, FIRST OF ALL, TO ASCERTAIN THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF THE EXPENDITURE INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE SAID ACT. EVEN WHERE THE ASSESSEE CLAIMS THAT NO EXPENDITURE HAS BEEN INCURR ED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF TOTAL INCOME, THE ASSESSING O FFICER WILL HAVE TO VERIFY THE CORRECTNESS OF SUCH CLAIM. IN CASE, THE ASSESSING O FFICER IS SATISFIED WITH THE CLAIM OF THE ASSESSEE WITH REGARD TO THE EXPENDITURE OR N O EXPENDITURE, AS THE CASE MAY BE, THE ASSESSING OFFICER IS TO ACCEPT THE CLAIM OF THE ASSESSEE INSOFAR AS THE QUANTUM OF DISALLOWANCE UNDER SECTION L4A IS CONCER NED. IN SUCH EVENTUALITY, THE ASSESSING OFFICER CANNOT EMBARK UPON A DETERMINATIO N OF THE AMOUNT OF EXPENDITURE FOR THE PURPOSES OF SECTION L4A(L). IN CASE, THE ASSESSING OFFICER IS NOT, ON THE BASIS OF OBJECTIVE CRITERIA AND AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY, SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE, HE SHALL HAVE TO REJECT THE CLAIM AND STATE THE REASONS FOR DOING SO. HAVING DONE SO, THE ASSESSING OFFICER WILL HAVE TO DETERMINE THE AMOUNT OF EXPENDITURE INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE SAID I.T.A. NO.5197/DEL./2011 (A.Y. : 2007-08) 7 ACT. HE IS REQUIRED TO DO SO ON THE BASIS OF A REAS ONABLE AND ACCEPTABLE METHOD OF APPORTIONMENT. 43. AT THIS JUNCTURE, WE MUST MAKE IT CLEAR THAT DR RAKESH GUPTA'S ARGUMENTS THAT RULE 8D OF THE .SAID RULES EXCEEDS THE MANDATE OF SECTION 14A, HAVE NOT BEEN CONSIDERED BY US BECAUSE THE APPEALS BEFORE US ARE IN RESPECT OF ASSESSMENT YEARS PRIOR TO THE INTRODUCTION OF RULE 8D. WE THER EFORE REFRAIN FROM EXPRESSING ANY OPINION ON THE ISSUE AS TO WHETHER RULE 8D (AND , TO WHAT EXTENT, IF AT ALL) IS ULTRA VIRES SECTION 14A OF THE SAID ACT. 8. IN VIEW OF JURISDICTIONAL HIGH COURT JUDGMENT AN D CONSIDERING THE ENTIRETY, CIRCUMSTANCES AND MATERIAL ON RECORD, WE FIND IT JU ST AND APPROPRIATE TO SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE MAT TER BACK ON THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO RE-COMPUTE THE DISALL OWANCE U/S 14A OF THE I.T. ACT, 1961 IN ACCORDANCE WITH THE JUDGMENT CITED ABOVE, AFTER GIV ING DUE OPPORTUNITY TO THE ASSESSEE. 9. AS A RESULT, THE APPEAL OF THE ASSESSEE GETS AC CEPTED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 23/03/2012. SD/- SD/- (B.C. MEENA) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : MARCH 23, 2012 SKB COPY OF THE ORDER FORWARDED TO:- 1. APPLICATION 2. RESPONDENT 3. CIT 4. CIT(A)-VIII, NEW DELHI. 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT I.T.A. NO.5197/DEL./2011 (A.Y. : 2007-08) 8