M/s. J.H. Fin-vest Pvt. Ltd., Delhi V. DCIT, New Delhi

ITA 5231/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74022 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 17-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 10-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH D DD D : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO. .. .5231/DEL/2012 5231/DEL/2012 5231/DEL/2012 5231/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2008 2008 2008 2008- -- -09 0909 09 M/S J.H. FIN M/S J.H. FIN M/S J.H. FIN M/S J.H. FIN- -- -VEST PVT.LTD., VEST PVT.LTD., VEST PVT.LTD., VEST PVT.LTD., (NOW AMALGAMATED WITH THE (NOW AMALGAMATED WITH THE (NOW AMALGAMATED WITH THE (NOW AMALGAMATED WITH THE COM COM COM COMPANY M/S SURYA VINAYAK PANY M/S SURYA VINAYAK PANY M/S SURYA VINAYAK PANY M/S SURYA VINAYAK HOSPITALITIES PVT.LTD.), HOSPITALITIES PVT.LTD.), HOSPITALITIES PVT.LTD.), HOSPITALITIES PVT.LTD.), 13 1313 13- -- -B, 3 B, 3 B, 3 B, 3 RD RDRD RD FLOOR, FLOOR, FLOOR, FLOOR, NETAJI SUBHASH MARG, NETAJI SUBHASH MARG, NETAJI SUBHASH MARG, NETAJI SUBHASH MARG, DARYAGANJ, DARYAGANJ, DARYAGANJ, DARYAGANJ, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 002. 110 002. 110 002. 110 002. PAN : AABCJ1341H. PAN : AABCJ1341H. PAN : AABCJ1341H. PAN : AABCJ1341H. VS. VS. VS. VS. DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -25, 25, 25, 25, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJEEV SAXENA, ADVOCATE. RESPONDENT BY : SHRI S.N. BHATIA, SR.DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A)-I, NEW DELHI DATED 11 TH JULY, 2012 FOR THE AY 2008-09. 2. THE ONLY GROUND RAISED BY THE ASSESSEE READS AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD .CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.4,20 ,376/- U/S 14A OF THE INCOME TAX ACT. 3. AT THE TIME OF HEARING BEFORE US, THE LEARNED CO UNSEL ARGUED AT LENGTH. HE STATED THAT AS PER SECTION 14A OF THE I NCOME-TAX ACT, 1961, DISALLOWANCE CAN BE MADE ONLY IF THERE IS SOME EXPE NDITURE INCURRED IN RELATION TO EARNING OF EXEMPT INCOME. AS PER SECTI ON 14A(2) AND (3), THE ASSESSING OFFICER HAS TO RECORD THE FINDING THA T HE IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE. THEN ONLY HE CAN ITA-5231/D/2012 2 PROCEED TO MAKE THE DISALLOWANCE UNDER RULE 8D(3). THAT IN THE CASE UNDER APPEAL, THE ASSESSING OFFICER HAS NOT RECORDE D WHY HE IS NOT SATISFIED WITH THE ASSESSEES CLAIM THAT NO DISALLO WANCE UNDER SECTION 14A IS REQUIRED TO BE MADE. IN THE ABSENCE OF ANY SATISFACTION, THE DISALLOWANCE MADE UNDER SECTION 14A IS NOT JUSTIFIE D. IN SUPPORT OF THIS CONTENTION, HE RELIED UPON THE FOLLOWING DECISIONS OF ITAT:- (I) M/S P.P.C. BUSINESS & PRODUCTS PVT.LTD. VS. DCIT ITA NO.5232/DEL/2012, ORDER DATED 11 TH DECEMBER, 2012. (II) M/S ACME COMPUTERS LTD. VS. DCIT AND ANOTHER ITA NO.5386/DEL/2012 & 5387/DEL/2012, ORDER DATED 28 TH FEBRUARY, 2013. 4. IT IS FURTHER SUBMITTED BY THE LEARNED COUNSEL T HAT THE DECISION OF A DIVISION BENCH IS BINDING ON ANOTHER DIVISION BEN CH AND IF FOR ANY REASON THE DIVISION BENCH IS UNABLE TO AGREE WITH T HE DECISION OF ANOTHER DIVISION BENCH, THEY SHOULD REFER THE MATTE R TO THE SPECIAL BENCH AND SHOULD NOT TAKE A CONTRARY VIEW. HE FURT HER SUBMITTED THAT SINCE IN THIS CASE NO EXPENDITURE WAS INCURRED BY T HE ASSESSEE FOR EARNING OF EXEMPT INCOME, NO DISALLOWANCE UNDER SEC TION 14A CAN BE MADE. HE, THEREFORE, SUBMITTED THAT THE DISALLOWAN CE MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT( A) SHOULD BE DELETED. 5. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE O RDER OF THE ASSESSING OFFICER AND HE STATED THAT SECTION 14A WA S INSERTED BY THE FINANCE ACT, 2001 SO AS TO AVOID THE LITIGATION WHI CH WAS PREVAILING IN RESPECT OF ALLOCATION OF EXPENDITURE BETWEEN THE TA XABLE INCOME AND EXEMPT INCOME. THAT IN FURTHERANCE TO SUCH OBJECTI VE, RULE 8D HAS BEEN PROVIDED. THAT IN THIS CASE, THE ASSESSEE HAS CLAIMED THAT NO DISALLOWANCE IS TO BE MADE UNDER SECTION 14A. THE ASSESSING OFFICER ITA-5231/D/2012 3 HAS DISCUSSED THE SAME AT LENGTH AND THEREAFTER CAM E TO THE CONCLUSION THAT DISALLOWANCE UNDER SECTION 14A IS R EQUIRED TO BE MADE. THEREFORE, THE CONTENTION OF THE ASSESSEE THAT NO S ATISFACTION IS RECORDED BY THE ASSESSING OFFICER IS FACTUALLY INCO RRECT. HE FURTHER STATED THAT TO AVOID THE DISPUTE WITH REGARD TO ALL OCATION OF THE EXPENDITURE RELATING TO EXEMPT INCOME, THE LEGISLAT URE HAS PROVIDED RULE 8D WHICH IS APPLICABLE IN THE YEAR UNDER CONSI DERATION. ONCE RULE 8D IS APPLICABLE, THE ASSESSEE CAN POINT OUT A MIST AKE, IF ANY, IN THE WORKING BY THE ASSESSING OFFICER IN RESPECT OF RULE 8D. HOWEVER, WITHOUT POINTING OUT ANY SUCH MISTAKE, THE ASSESSEE CANNOT CLAIM THAT NO DISALLOWANCE UNDER SECTION 14A IS REQUIRED TO BE MADE. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. THE ONL Y DISPUTE IN THIS APPEAL IS WITH REGARD TO DISALLOWANCE MADE BY THE A SSESSING OFFICER UNDER SECTION 14A AMOUNTING TO ` 4,20,376/- WHICH IS SUSTAINED BY THE LEARNED CIT(A). THE ASSESSEE HAS DISPUTED THE DISA LLOWANCE MAINLY ON TWO GROUNDS (I) THAT NO SATISFACTION IS RECORDED BY THE ASSESSING OFFICER AS ENVISAGED BY SUB-SECTION (2) & (3) OF SE CTION 14A, AND (II) THAT NO EXPENDITURE WAS INCURRED BY THE ASSESSEE FO R EARNING OF EXEMPT INCOME. IN SUPPORT OF THE FIRST CONTENTION, THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED UPON THE TWO DECISIONS OF ITAT DELHI BENCHES IN THE CASE OF P.P.C. BUSINESS & PRODUCTS P VT. LTD. (SUPRA) AND M/S ACME COMPUTERS LTD. (SUPRA). SO FAR AS THE LEG AL PROPOSITION PUT FORTH BY THE LEARNED COUNSEL IS CONCERNED, THERE CA NNOT BE ANY DISPUTE. AS PER SUB-SECTION (2) OF SECTION 14A, THE ASSESSIN G OFFICER CAN EMBARK UPON DETERMINATION OF AMOUNT OF EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME ONLY IF HE RECORDS A FIND ING THAT HE IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF SUCH EXPENDITURE. SUB-SECTION (3) OF SECTION 14A F URTHER EXTENDS THE SCOPE OF SUB-SECTION (2) AND THE ASSESSING OFFICER IS REQUIRED TO RECORD ITA-5231/D/2012 4 THE SIMILAR FINDING EVEN WHERE THE ASSESSEE CLAIMS THAT NO EXPENDITURE HAS BEEN INCURRED BY HIM IN RELATION TO THE EXEMPT INCOME. THEREFORE, THE CONTENTION OF THE LEARNED COUNSEL, THAT BEFORE PROCEEDING TO MAKE THE DISALLOWANCE UNDER SECTION 14A THE ASSESSING OF FICER HAS TO RECORD HIS SATISFACTION AS REQUIRED BY SUB-SECTION (2) & ( 3) OF SECTION 14A, IS ACCEPTED. 7. NOW, WE HAVE TO EXAMINE WHETHER IN THIS CASE, TH E SATISFACTION HAS BEEN RECORDED. THE ASSESSING OFFICER HAS DISCU SSED THIS ISSUE AT PAGES 3 TO 6 OF HIS ORDER. FIRST, THE ASSESSING OF FICER VIDE QUESTIONNAIRE DATED 23 RD SEPTEMBER, 2010, ASKED THE ASSESSEE WHY THE DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8 D SHOULD NOT BE MADE. THE ASSESSEE VIDE LETTER DATED 15.10.2010 RE PLIED AS UNDER:- DURING THE YEAR UNDER ASSESSMENT THE COMPANY HAS N OT EARNED ANY DIVIDEND INCOME AS WELL AS ANY EXEMPT INCOME, HENCE QUESTION OF DISALLOWANCE OF EXPENSES AS PER PROVISIONS OF SEC. 14A IS NOT APPLICABLE. 8. THUS, THE ASSESSEES ONLY CONTENTION BEFORE THE ASSESSING OFFICER WAS THAT SINCE THE ASSESSEE COMPANY DID NOT EARN AN Y DIVIDEND INCOME DURING THE RELEVANT ASSESSMENT YEAR, HENCE, THE QUESTION OF DISALLOWANCE OF THE EXPENSES AS PER PROVISIONS OF S ECTION 15A IS NOT APPLICABLE. THE ASSESSING OFFICER EXAMINED THE ABO VE CONTENTION AT LENGTH CONSIDERING VARIOUS JUDICIAL PRONOUNCEMENTS AT PAGES 3 TO 5 OF HIS ORDER AND THEREAFTER CONCLUDED AS UNDER:- 2.9 VERY RECENTLY IN THE CASE OF M/S RENAISSANCE A SSET MANAGEMENT CO.(P) LTD. VS. ASSESSING OFFICER ITAT, DELHI D BENCH (2010) 2 ITR (TRIB) 765, AFTER RELYING ON THE CASE OF CIT VS. REJENDER PRASAD MOODY (1978) 115 ITR 519 , IT WAS HELD THAT IT IS NOT RELEVANT AS TO WHETHER ANY DIVIDEND INCOME WAS RECEIVED BY THE ASSESSEE OR NOT AND WHAT IS THE AMOUNT OF DIVIDEND INCOME. ANY EXPENDITURE REL ATABLE TO ANY EXPENDITURE RELATABLE TO INVESTMENT ACTIVITY HAS TO ITA-5231/D/2012 5 BE CONSTRUED AS EXPENSES INCURRED FOR EARNING DIVID END INCOME AND THE SAME CANNOT BE ALLOWED AS PER SECTIO N 14A. FURTHER IT WAS HELD IN THIS CASE THAT AO HAS TO APPLY RULE 8D WHICH WERE CONSIDERED TO BE RETROSPECTIVE I N NATURE. 2.10 IN THE IMMEDIATE PRECEDING YEAR, THE DISALLOWA NCE WAS ALSO MADE ON THE ISSUE FOR SIMILAR FACT BY APPL ICATION OF SECTION 14A READ WITH RULE 8D. SINCE THERE IS N O CHANGE IN FACTS IN THIS YEAR DISALLOWANCE U/S 14A IS MADE. 2.11 IN VIEW OF ABOVE DISCUSSION, FACTS OF THE CASE AND THE LAW AS INTERPRETED BY VARIOUS COURTS, IT IS HELD TH AT THE CIRCUMSTANCES WARRANT APPLICABLE OF PROVISIONS OF S ECTION 14A READ WITH RULE 8D WHICH HAS RETROSPECTIVE EFFEC T. THE DISALLOWANCE AS PER RULE 8D WILL BE AS UNDER:. 9. FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSING OFFICER AFTER DETAILED DISCUSSION HAS ARRIVED AT THE CONCLUSION T HAT DISALLOWANCE IS REQUIRED TO BE MADE UNDER SECTION 14A READ WITH RUL E 8D. THEREFORE, WHILE ON LAW, WE AGREE WITH THE ABOVE DECISIONS OF ITAT RELIED UPON BY THE LEARNED COUNSEL THAT RECORDING OF THE SATISFACT ION BY THE ASSESSING OFFICER AS ENVISAGED BY SUB-SECTION (2) & (3) OF SE CTION 14A IS MUST BEFORE MAKING ANY DISALLOWANCE, ON FACTS, THOSE DEC ISIONS WOULD NOT BE APPLICABLE BECAUSE IN THE ASSESSEES CASE, IN OU R OPINION, THE ASSESSING OFFICER, AFTER DETAILED DISCUSSION, HAS R ECORDED HIS SATISFACTION WITH REGARD TO APPLICABILITY OF SECTIO N 14A. 10. COMING TO THE ASSESSEES SECOND CONTENTION THAT NO EXPENDITURE WAS INCURRED FOR EARNING OF EXEMPT INCOME, IT MAY B E POINTED OUT AT THE OUTSET THAT THIS WAS NOT THE ASSESSEES CLAIM B EFORE THE ASSESSING OFFICER. BEFORE THE ASSESSING OFFICER, THE ONLY LI MITED CLAIM BY THE ASSESSEE WAS THAT NO EXEMPT INCOME WAS EARNED BY TH E ASSESSEE. HOWEVER, BEFORE US, THE ASSESSEE CLAIMED THAT NO EX PENDITURE WAS INCURRED BY IT FOR EARNING OF EXEMPT INCOME AND IN THIS REGARD, HE REFERRED TO THE ASSESSEES PROFIT & LOSS ACCOUNT AN D BALANCE SHEET AND POINTED OUT THAT THE TOTAL EXPENDITURE INCURRED BY THE ASSESSEE WAS ITA-5231/D/2012 6 ONLY ` 4,27,376/- WHICH WAS MAINLY ADMINISTRATIVE EXPENDIT URE AND PRELIMINARY EXPENSES WRITTEN OFF. HE ALSO CLAIMED THAT NO FRESH INVESTMENT WAS MADE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AND IT IS ONLY THE OLD INVESTMENT WHI CH CONTINUED IN THE YEAR UNDER CONSIDERATION. THE ASSESSEES CONTENTIO N HAS BEEN CONSIDERED AND WE FIND THAT IN THE PROFIT & LOSS AC COUNT IN THE INCOME SIDE, THERE IS ONLY ONE INCOME AMOUNTING TO ` 7,03,795/- UNDER THE HEAD OTHER INCOME. FROM THE SCHEDULE OF THE OTHE R INCOME, IT IS FOUND THAT IT WAS THE INTEREST RECEIVED. THUS, DUR ING THE YEAR UNDER CONSIDERATION, THE ONLY INCOME WAS THE INTEREST REC EIVED BY THE ASSESSEE AMOUNTING TO ` 7,03,795/-. WHEN WE ANALYZE THE ASSESSEES BALANCE SHEET, WE FIND THE TOTAL FUNDS AVAILABLE WI TH THE ASSESSEE IN THE FORM OF SHARE CAPITAL AND UNSECURED LOAN AMOUNT ING TO ` 24,53,32,170/-. THE FIXED ASSETS IS ONLY ` 8,000/- AND CASH AND BANK BALANCE IS ONLY ` 2,55,000/-. MAJOR APPLICATION OF FUNDS IS IN THE F ORM OF INVESTMENT AT ` 23,45,63,810/- AND LOANS AND ADVANCES AT ` 1,08,11,435/-. THE ENTIRE INVESTMENT OF ` 23.45 CRORES IS IN THE FORM OF SHARES OF VARIOUS UNLISTED COMPANIES, THE DETAILS O F WHICH IS GIVEN IN SCHEDULE-E AND THE SAME IS REPRODUCED BELOW FOR REA DY REFERENCE:- SCHEDULE-E INVESTMENTS PARTICULARS AS AT 31.03.2008 AS AT 31.03.2007 INVESTMENTS IN UNLISTED & UNQUOTED COMPANIES. A) INVESTMENT IN FORM OF SHARES I) 160,000 EQUITY SHARES OF RS.10/- EACH 1,920,000 .00 1,920,000.00 OF BHARAT EXPORT CORPORATION PVT.LTD. (P.Y 160000 EQUITY SHARES OF RS.10/- EACH) II) 177,000 EQUITY SHARES OF RS.10/- EACH OF TEXEFX MARBLE INDUSTRIES LTD. 88,500.00 88,5 00.00 (P.Y 177000 EQUITY SHARES OF RS.10/- EACH) III) 330,020 EQUITY SHARES OF RS.10/- EACH OF J.H. BUSINESS INDIA PVT.LTD. 480,210.00 480, 110.00 (P.Y 330010 EQUITY SHARES OF RS.10/- EACH) ITA-5231/D/2012 7 IV) 19,19,810 EQUITY SHARES OF RS.10/- EACH OF P.P.C. BUSINESS & PRODUCTS PVT.LTD. 19,198,100 .00 19,198,100.00 (P.Y 19,19,810 EQUITY SHARES OF RS.10/- EACH) V) 22,17,500 EQUITY SHARES OF RS.10/- EACH OF SURYA VINAYAK INDUSTRIES LTD. 101,325,000.00 101,325,000.00 (P.Y 21,70,000 EQUITY SHARES OF RS.10/- EACH) VI) 4,96,000 EQUITY SHARES OF RS.10/- EACH OF ALLIED PERFUMERS P.LTD. 5,952,000.00 5,952,0 00.00 (P.Y 4,96,000 EQUITY SHARES OF RS.10/- EACH) VII) NIL EQUITY SHARES OF RS.10/- EACH OF GLOBAL BUSINESS INDIA P.LTD. -- 25,000,00 (P.Y 50,000 EQUITY SHARES OF RS.10/- EACH) VII) 239,200 EQUITY SHARES OF RS.100/- EACH OF SVIL MINES LTD. 105,600,000.00 105,600,000. 00 (P.Y 239,200 EQUITY SHARES OF RS.10/- EACH) TOTAL 234,563,810.00 234,563,710.00 ________________ ________________ 11. THUS, WHEN OUT OF THE AVAILABLE FUNDS OF ` 24.53 CRORES, MORE THAN 95% FUNDS I.E. ` 23.45 CRORES IS INVESTED IN THE SHARES OF VARIOUS COMPANIES, CAN IT BE SAID THAT THE ENTIRE EXPENDITU RE DEBITED TO THE PROFIT & LOSS ACCOUNT WAS INCURRED FOR EARNING OF I NTEREST INCOME WHICH WAS RECEIVED FROM THE LOANS AND ADVANCES OF ` 1.08 CRORES. IF WE LOOK AT THE APPLICATION OF THE FUNDS OF THE ASSESSEE, IT WOULD BE EVIDENT THAT THE COMPANY IS MAINLY UTILIZING ITS FUNDS FOR THE P URPOSE OF INVESTMENT IN THE EQUITY SHARES. WHEN THE COMPANY IS EXISTING MAINLY FOR THE PURPOSE OF INVESTING IN SHARES, IT CAN BY NO STRETC H OF IMAGINATION BE SAID THAT THE EXPENDITURE WAS INCURRED WHOLLY AND E XCLUSIVELY FOR EARNING OF INTEREST INCOME ONLY IN WHICH THE INVEST MENT IS OF LESS THAN 5% OF THE ASSESSEES FUNDS. THEREFORE, THE ONLY RE ASONABLE AND LOGICAL CONCLUSION CAN BE TO ALLOCATE THE EXPENDITURE BETWE EN THE EXEMPT INCOME AND NON-EXEMPT INCOME. THAT RULE 8D HAS BEE N INTRODUCED TO AVOID THE DISPUTE WITH REGARD TO ALLOCATION OF THE EXPENDITURE BETWEEN THE EXEMPT INCOME AND TAXABLE INCOME. THE ASSESSME NT YEAR UNDER CONSIDERATION IS 2008-09 AND ADMITTEDLY, RULE 8D WA S APPLICABLE. THAT THE ASSESSING OFFICER HAS COMPUTED THE DISALLOWANCE UNDER RULE 8D ITA-5231/D/2012 8 AND AS PER FORMULA PROVIDED UNDER RULE 8D, THE DISA LLOWANCE WORKED OUT TO ` 11,72,819/-. HOWEVER, SINCE THE ACTUAL EXPENDITURE INCURRED BY THE ASSESSEE WAS ONLY ` 4,27,376/- OUT OF WHICH A SUM OF ` 7,000/- WAS SEPARATELY DISALLOWED BY THE ASSESSING OFFICER, THE REFORE, HE RESTRICTED THE DISALLOWANCE AT ` 4,20,376/-. THE ASSESSEE HAS NOT POINTED OUT ANY MISTAKE IN THE WORKING OF DISALLOWANCE UNDER RULE 8 D BY THE ASSESSING OFFICER. SINCE THE DISALLOWANCE UNDER RULE 8D AS W ORKED OUT AS PER THE FORMULA GIVEN IN THE RULES WAS MORE THAN THE AC TUAL EXPENDITURE, THE ASSESSING OFFICER HAS RIGHTLY RESTRICTED THE DI SALLOWANCE TO THE EXPENDITURE ACTUALLY INCURRED BY THE ASSESSEE. WE DO NOT FIND ANY INFIRMITY THEREIN. THE SAME IS SUSTAINED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 17 TH JANUARY, 2014. SD/- SD/- ( (( (ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 17.01.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : M/S J.H. FIN M/S J.H. FIN M/S J.H. FIN M/S J.H. FIN- -- -VEST PVT.LTD., VEST PVT.LTD., VEST PVT.LTD., VEST PVT.LTD., (NOW AMALGAMATED (NOW AMALGAMATED (NOW AMALGAMATED (NOW AMALGAMATED WITH THE COMPANY WITH THE COMPANY WITH THE COMPANY WITH THE COMPANY M/S SURYA VINAYAK HOSPITALITIES PVT.LTD.), M/S SURYA VINAYAK HOSPITALITIES PVT.LTD.), M/S SURYA VINAYAK HOSPITALITIES PVT.LTD.), M/S SURYA VINAYAK HOSPITALITIES PVT.LTD.), 13 1313 13- -- -B, 3 B, 3 B, 3 B, 3 RD RDRD RD FLOOR, NETAJI SUBHASH MARG, FLOOR, NETAJI SUBHASH MARG, FLOOR, NETAJI SUBHASH MARG, FLOOR, NETAJI SUBHASH MARG, DARYAGANJ, NEW DELHI DARYAGANJ, NEW DELHI DARYAGANJ, NEW DELHI DARYAGANJ, NEW DELHI 110 002. 110 002. 110 002. 110 002. 2. RESPONDENT : DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -25, NEW DELHI. 25, NEW DELHI. 25, NEW DELHI. 25, NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR