KOTAK MAHINDRA ASSET MANAGEMAENT CO .LTD., MUMBAI V. ACIT (HQ)(JUDL)PR. CIT, MUMBAI

ITA 5239/MUM/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 8413 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2012-2013
• Appeal Filed On: 11-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Assessee Lawyers: CHETANKAKKA ARS
• Keywords: Earning of tax free income; TDS; Rule 8D; Capital Gains
• Section: 14A; 201; 43; 13; 6; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H , MUMBAI BEFORE S HRI PRAMOD KUMAR (VP ) AND SHRI RAM LAL NEGI (JM) ITA NO. 5239 /MUM/2018 ASSESSMENT Y EAR: 2012 - 2013 & ITA NO. 5240 /MUM/2018 ASSESSMENT Y EAR: 2013 - 2014 M/S KOTAK MAHINDRA ASSET MGT. C O. LTD., 27 BKC, G BLOCK, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI - 51 PAN: AAACK5576C VS. THE ASST. COMMISSIONER OF INCOME TAX - (HQ) (JUDL) TO THE PR. CIT AAYAKAR BHAVAN, MUMBAI - 400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI FARROKH IRANI & CHETAN KAKKA (AR S ) REVENUE BY : SHRI PANKAJ KUMAR (D R ) DATE OF HEARING: 03/12 /201 9 DATE OF PRONOUNCEMENT: 13 / 12 /201 9 O R D E R PER RAM LAL NEGI, JM THE ASSESSEE HAS FILED THE CAPTI ONED APPEALS AGAINST THE TWO ORDER S DATED 28.06.2018 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 22 (FOR SHORT THE CIT(A) , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR S 2012 - 13 AND 2013 - 14 , WHEREBY THE LD. CIT(A) HAS PARTLY ALLOWED THE APPEAL S FILED B Y THE ASSESSEE AGAINST THE ASSESSMENT ORDER S PASSED U/S 143 (3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). SINCE, THESE APPEA LS PERTAIN TO THE SAME ASSESSEE AND THE ISSUES RAISED ARE IDENTICAL IN BOTH THE APPEALS , THESE WERE CLUBBED, HEARD TOGETHE R AND ARE BEING DISPOSED OF BY THIS COMMON AND CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2 ITA NO S . 5239/MUM/2018 & 5240 / MUM/2018 ASSESSMENT YEAR S : 2012 - 13 AND 2013 - 1 4 IT A NO. 5239/MUM/2018 (ASSESSMENT YEAR: 2012 - 2013 ) BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF PROVIDING MANAGEMENT, ADMINI STRATIVE SERVICES, ASSET MANAGEMENT AND PORTFOLIO ADVISORY SERVICES, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING THE TOTAL INCOME AT RS. 19,11,70,780/ - . SINCE, THE CASE SELECTED FOR SCRUTINY, T HE AO ISSUED NOTICES U/S 1 43 (2) AND 142 (1) OF THE ACT. IN RESPONSE TO THE SAID NOTICES, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE (AR) APPEARED BEFORE THE AO AND FURNISHED THE DETAILS CALLED FOR. IT WAS NOTICED THAT THE ASSESSEE HA D EARNED DIVIDEND INCOME OF RS. 2,14,34,581/ - DURING THE PREVIOUS YEAR. SINCE, THE ASSESSEE HA D NOT MADE ANY DISALLOWANCE UNDER SECTION 14A OF ACT, THE AO ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY DISALLOWANCE U/S 14A READ WITH RULE 8D OF THE INCOME TAX RULES (THE RULES) SHOULD NOT BE MADE . 2. THE ASSESSEE CONTENDED THAT THE INVESTMENTS WERE MADE OUT OF OWN FUNDS AND NO INTEREST EXPENSES WERE INCURRED. IT WAS FURTHER CONTENDED T HE INVESTMENTS WERE MADE IN SUBSIDIARY AND GROUP COMPANIES FOR LONG TERM PURPOSES; THEREFORE, NO ADMINISTRATIVE EXPENDITURE WAS INCURRED. MOREOVER, DURING THE YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION NO FRESH INVESTMENTS WERE MADE. THE AO REJECTING THE CONTENTION OF THE ASSESSEE COMPUTED THE DISALLOWANCE U/S 14A READ WITH RULE 8D AT RS. 17,90,000/ - AND AFTER M AKING ADDITION OF THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE DETERMINED THE TOTAL INCOME AT RS. 19,29,60,783/ - . THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD.CIT (A). THE LD.CIT (A) AFTER HEARING THE ASSESSEE PARTLY ALLOWED THE APPEAL, HOWE VER, SUSTAINED THE DISALLOWANCE MADE BY THE AO. AGAINST THE SAID FINDINGS OF THE LD. CIT (A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3 . THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) ON THE FOLLOWING EFFECTIVE GROUND S : - GROUND NO. 1 - DISALLOWANCE U/S 14A AS PER RULE 8D OF RS. 17,90,000/ - 3 ITA NO S . 5239/MUM/2018 & 5240 / MUM/2018 ASSESSMENT YEAR S : 2012 - 13 AND 2013 - 1 4 1. THE COMMISSIONER OF INCOME TAX (APPEALS) - 22, MUMBAI (HEREINAFTER REFERRED TO AS THE CIT (A)) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AT RS. 17,90,000/ - U /S 14A BY INVOKING AND APPLYING THE PROVISIONS OF RULE 8D SUMMARILY AND MECHANICALLY. 2. HE ERRED IN DISREGARDING THE ACCOUNTS OF THE APPELLANT AND IGNORING THE DETAILED SUBMISSIONS MADE REGARDING THE CORRECTNESS OF THE APPELLANTS CLAIM. 3. HE FURTHER ERRED IN CONFIRMING THE INVOCATION OF SECTION 14A AND RULE 8D WITHOUT BEING RECORDING ANY SATISFACTION REGARDING INCORRECTNESS OF THE APPELLANTS CLAIM. 4. HE FURTHER ERRED IN CONSIDERING INVESTMENTS MADE IN SHARES OF UNLISTED COMPANIES WHICH ARE CAPABLE TO GENERATE T AXABLE CAPITAL GAINS FOR THE PURPOSE OF DISALLOWANCE U/S 14A READ WITH RULE 8D. 5. HE FAILED TO APPRECIATE AND OUGHT TO HAVE HELD THAT: A. UNDER SECTION 14A, IT IS VERY MUCH CLEAR THAT ONLY THE EXPENDITURE WHICH HAS BEEN PROVED TO BE INCURRED IN RELATION TO EARN ING OF TAX FREE INCOME CAN BE DISALLOWED AND, THE SECTION CANNOT BE EXTENDED TO DISALLOW EVEN THE EXPENDITURE WHICH IS ASSUMED TO HAVE BEEN INCURRED FOR EARNING TAX FREE INCOME. B. HAVING REGARD TO THE ACCOUNTS, THERE WAS NO BASIS FOR MAKING A DISALLOWANCE IN ACCORDANCE WITH RULE 8D TO SECTION 14A, WITHOUT FIRST ESTABLISHING THAT SUCH EXPENDITURE WAS INDEED INCURRED FOR EARNING EXEMPT DIVIDEND INCOME. C. THE APPELLANT HAS NOT INCURRED ANY EXPENDITURE WHICH WAS ATTRIBUTABLE TOWARDS EARNING OF TAX FREE DIVIDEND INC OME AND SUCH DISALLOWANCE CANNOT BE MADE ON THE BASIS OF PRESUMPTIONS AND BY APPLYING RULES MECHANICALLY. D. EXPENDITURE INCURRED REFERS TO ACTUAL EXPENDITURE, IF NO EXPENDITURE IS INCURRED IN RELATION TO EXEMPT INCOME, NO DISALLOWANCE CAN BE MADE. E. DEPARTMENT FAILED TO LEAD ANY PROOF THAT THE EXPENDITURE SOUGHT TO BE DISALLOWED HAS ACTUALLY BEEN INCURRED IN EARNING THE DIVIDEND INCOME. F. THE APPELLANT HAS MADE INVESTMENTS IN ITS OWN GROUP COMPANIES IN THE PAST WHICH ARE STRATEGIC IN NATURE AND WHICH DOES NOT RE QUIRE DAY - TODAY MONITORING. 4 ITA NO S . 5239/MUM/2018 & 5240 / MUM/2018 ASSESSMENT YEAR S : 2012 - 13 AND 2013 - 1 4 G. APPLICATION OF FORMULA AS PER RULE 8D TOTALLY INEQUITABLE AND THIS DISALLOWANCE HAS NO RELATION TO NEITHER THE EXEMPT INCOME OR TO THE EXPENDITURE CLAIMED BY THE APPELLANT. 6. THE APPELLANT PRAYS THAT THE AO BE DIRECTED TO DELETE T HE ENTIRE DISALLOWANCE OF 17,90,000/ - U/S 14A MADE BY THE AO. 7. WITHOUT PREJUDICE TO THE ABOVE, THE APPELLANT PRAYS THAT THE AO BE DIRECTED TO EXCLUDE INVESTMENT MADE IN UNLISTED COMPANIES FOR WORKING OUT DISALLOWANCE U/S 14A. 4. THE SOLE GROUND RAISED BY THE ASSESSEE IS AGAINST THE CONFIRMATION OF ADDITION OF RS. 17,90,000/ - MADE ON ACCOUNT OF DISALLOWANCE U/S 14A R.W.R. 8D OF THE RULES BY THE LD CIT(A) . AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ITAT HAS DEALT WITH THE IDENTICAL ISSUE IN ASSESSEES OWN CASE ITA NO. 3424/MUM/ 2016 FOR THE AY 2011 - 12 AND THE TRIBUNAL FOLLOWING THE DECISION OF THE SPECIAL BENCH OF THE ITAT, DELHI IN ACIT VS. V IREET INVESTMENTS DIRECTED THE AO TO CONSIDER ONLY THOSE INVESTMENTS WHICH YIELDED EXEMPT I NCOME DURING THE YEAR UNDER CONSIDERATION AND RE - COMPUTE THE DISALLOWANCE U/S 14A R.W.R. 8D OF THE RULES. SIMILARLY, IN ITA NO. 781 AND 782/MUM/2018 FOR THE AY 2013 - 14 AND 2014 - 15 RESPECTIVELY THE MUMBAI BENCH OF THE TRIBUNAL HAS DECIDED THE IDENTICAL ISSU E FOLLOWING THE DECISION OF THE COORDINATE BENCH IN ORDER PERTAINING TO THE AY 2011 - 12. THE LD. COUNSEL FURTHER POINTED OUT THAT THE ITAT, MUMBAI HAS FURTHER DECIDED THE IDENTICAL ISSUE IN ASSESSEES CASE FOR THE ASSESSMENT YEAR 2012 - 13 BY FOLLOWING THE DE CISION OF THE COORDINATE BENCH RENDERED IN THE ASSESSEES CASE PERTAINING TO THE EARLIER YEARS. THE LD. COUNSEL FURTHER RELIED ON THE DECISIONS OF THE MUMBAI BENCHES IN WHICH THE AO WAS DIRECTED TO RE - COMPUTE THE DISALLOWANCES U/S 14A BY EXCLUDING INVESTME NTS WHICH WERE NOT CAPABLE OF YIELDING ANY EXEMPT INCOME. 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FAIRLY ADMITTED THAT THE ISSUE INVOLVED IN THIS CASE HAS BEEN DEALT WITH BY THE MUMBAI TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER AND SUBSEQUENT ASSESSMENT YEARS. HOWEVER, THE LD. DR SUPPORTED THE FINDINGS OF THE LD. CIT (A). 5 ITA NO S . 5239/MUM/2018 & 5240 / MUM/2018 ASSESSMENT YEAR S : 2012 - 13 AND 2013 - 1 4 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO CAREFULLY PERUSED THE MATERIAL ON RECORD IN THE LIGHT OF THE RIVAL CONTENTIONS OF THE PARTIES. THE ONLY ISSUE RAISE D BY THE ASSESSEE IS THAT THE LD. CIT (A) HAS WRONGLY CONFIRMED THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE U/S 14A R.W.R. 8 D AMOUNTING TO RS. 17,90,000/ - . AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE, THE COORDINATE BENCH HAS DEALT WITH THE IDENTIC AL ISSUE IN ASSESSEES OWN CASE ITA NO. 3424/MUM/2016, PERTAINING TO THE AY 2011 - 12, ITA NO. 781 AND 782/MUM/2018 FOR THE AY 2 013 - 14 AND 2014 - 15 RESPECTIVELY. THE COORDINATE BENCH IN ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2011 - 12 HAS DIRECTED THE AO TO RE - COMPUTE THE DISALLOWANCE U/S. 14A R.W. RULE 8D OF I.T. RULES TAKING INTO CONSIDERATION ONLY THOSE INVESTMENTS WHICH YIELDED EXEMPT INCOME DURING THE YEAR UNDER CONSIDERATION . THE RELEVANT PARAS OF THE DECISION READ AS UNDER: - 7. WE HAVE HEARD THE RI VAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. ON A PERUSAL OF THE ASSESSMENT ORDER WE FIND THAT THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FURNISH THE WORKING OF SECTION 14A R.W. RULE 8D OF I.T. RULES, ASSESSEE VIDE LETTER DATED 30.12.2 013 CONTENDED AS UNDER: - A) INVESTMENTS MADE IN GROUP COMPANIES ARE STRATEGIC IN NATURE AND HAVE BEEN MADE OUT OF OWN FUNDS. B) DURING THE YEAR UNDER ASSESSMENT, THERE IS NO INTEREST EXPENDITURE INCURRED TO EARN TAX FREE INCOME. C) AS REGARDS ADMINISTR ATIVE EXPENSES, SINCE THE INVESTMENTS ARE STRATEGIC IN NATURE, NO DAY TO DAY EXPENDITURE IS INCURRED ONCE THE INVESTMENTS ARE MADE. THEREFORE, NO EXPENDITURE ARE INCURRED TOWARDS ADMINISTRATIVE NATURE DURING THE YEAR UNDER ASSESSMENT. D) THE DISALLOWANCE U /S 14A HAS BEEN MADE BY THE COMPANY U/S 14A(1) AND NOT IN ACCORDANCE WITH 14A(2) READ WITH RULE 8D. E) HOWEVER, SINCE THE COMPANY HAS ALREADY DISALLOWED RS. 6,25,000/ - IN THE RETURN OF INCOME, NO FURTHER DISALLOWANCE IS REQUIRED UNDER SECTION 14A. 6 ITA NO S . 5239/MUM/2018 & 5240 / MUM/2018 ASSESSMENT YEAR S : 2012 - 13 AND 2013 - 1 4 8. WE O BSERVE FROM THE ASSESSMENT ORDER THAT SUBSEQUENTLY ASSESSEE SUBMITTED ANOTHER LETTER DATED 13.02.2014 WITHOUT PREJUDICE TO ITS EARLIER LETTER DATED 30.12.2013 GIVING THE WORKING OUTSTANDING DEMAND DISALLOWANCE U/S. 14A AS PER RULE 8D ARRIVING AT THE DISALL OWANCE OF .11,65,000/. WE OBSERVE FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER REJECTED THE CONTENTION OF THE ASSESSEE THAT THE STRATEGIC AND LONG TERM INVESTMENT SHOULD BE EXCLUDED FROM THE PURVIEW OF THE DISALLOWANCE. ACCORDINGLY, THE ASSESSING OFFICER COMPUTED THE DISALLOWANCE AT .11,65,000/ - . THE CONTENTION OF THE ASSESSEE, THAT THERE IS NO SATISFACTION RECORDED BY THE ASSESSING OFFICER WITH REGARD TO THE CORRECTNESS OF THE DISALLOWANCE CLAIM MADE BY THE ASSESSEE IS NOT CORRECT. THE ASSESSING OFFICER REJECTED THE CONTENTION OF THE ASSESSEE WHICH WERE SUBMITTED ON 30.12.2013 AND MOREOVER THE ASSESSEE HIMSELF HAS SUBMITTED ITS WITHOUT PREJUDICE CLAIM WORKING OUT DISALLOWANCE AT .11,65,000/ - , IN SUCH CIRCUMSTANCES WE DO NOT SEE ANY FAULT OF THE A SSESSING OFFICER IN NOT RECORDING ANY SATISFACTION REJECTING THE CLAIM OF THE ASSESSEE. THIS CONTENTION IS REJECTED. 9. COMING TO THE WITHOUT PREJUDICE CONTENTION OF THE ASSESSEE THAT WHILE COMPUTING ADMINISTRATIVE EXPENSES TO BE DISALLOWED U/S. 14A R.W. R ULE 8D2(III) OF I.T. RULES, ONLY THOSE INVESTMENTS ARE TO BE CONSIDERED WHICH YIELDED EXEMPT INCOME DURING THE YEAR UNDER CONSIDERATION, WE AGREE WITH THE LD. COUNSEL FOR THE ASSESSEE. THE SPECIAL BENCH IN THE CASE OF THE ACIT V. VIREET INVESTMENTS PRIVATE LIMITED (SUPRA), HAS TAKEN A SIMILAR VIEW. THUS, RESPECTFULLY FOLLOWING THE SAID DECISION WE DIRECT THE ASSESSING OFFICER TO CONSIDER ONLY THOSE INVESTMENTS WHICH YIELDED EXEMPT INCOME DURING THE YEAR UNDER CONSIDERATION AND RE COMPUTE THE DISALLOWANCE U/ S. 14A R.W. RULE 8D OF I.T. RULES. THIS GROUND IS PARTLY ALLOWED . 7. SIMILARLY, IN THE CASE OF KOTAK SECURUTIES LIMITED, VS. DCIT (SUPRA) , THE COORDINATE BENCH HAS DECIDED THE IDENTICAL ISSUE AND DIRECTED THE AO TO RE - COMPUTE THE DISALLOWANCE U/S 14A REA D WITH RULE 8D(2)(III) @ 0.5% AGAINST STRATEGIC INVESTMENTS AND STOCK IN TRADE AFTER EXCLUDING THOSE INVESTMENTS WHICH HAVE NOT YIELDED ANY EXEMPT INCOME DURING THE RELEVANT YEAR . THE FINDINGS OF THE COORDINATE BENCH OF THE TRIBUNAL READ AS UNDER: - 7 ITA NO S . 5239/MUM/2018 & 5240 / MUM/2018 ASSESSMENT YEAR S : 2012 - 13 AND 2013 - 1 4 4.4 WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORD INCLUDING JUDICIAL PRONOUNCEMENTS AS CITED BEFORE US. SO FAR AS THE LEGAL ISSUE AS RAISED BY LD. SR. COUNSEL IS CONCERNED, WE FIND THAT THE ISSUE IN HAND INVOLVES ONLY QUA NTUM OF ADMINISTRATIVE EXPENDITURE AS PER RULE 8D(2)(III). INTERESTINGLY, BOTH ASSESSEE AS WELL AS LD. AO HAS MADE COMPUTATIONS @ 0.5% AS PER RULE 8D(2)(III) ONLY AND THEREFORE, THE APPLICABILITY OF THE SAME IS NOT UNDER DISPUTE. THE DIFFERENCE IN COMPUTAT ION ARISES OUT OF THE FACT THAT THE ASSESSEE HAS EXCLUDED STRATEGIC INVESTMENT AS WELL AS STOCK - IN - TRADE WHILE ARRIVING AT THE DISALLOWANCE WHEREAS LD. AO HAS ADOPTED THE AGGREGATE VALUE OF INVESTMENTS IRRESPECTIVE OF THEIR NATURE. IN OUR OPINION, THERE IS NO QUARREL BETWEEN THE ASSESSEE AND THE REVENUE AS TO APPLICABILITY OF RULE 8D(2)(III) AND THEREFORE, THE LEGAL SUBMISSIONS AS MADE BY THE LD. SR. COUNSEL WERE NOT OF MUCH RELEVANCE AND THE SAME HAS TO BE DISREGARDED. 4.5 SO FAR AS THE NATURE OF INVESTMEN TS VIZ. STRATEGIC INVESTMENTS/STOCK - IN - TRADE IS CONCERNED, WE FIND THAT THE CONTROVERSY STOOD SETTLED BY THE RECENT DECISION OF HONBLE APEX COURT RENDERED IN GROUP OF CASES TITLED AS MAXOPP INVESTMENTS LTDS. VS. CIT [ 12/02/2018 91 TAXMANN.COM 154], WHERE IN HONBLE COURT HAS EXPRESSED IN VIEW THAT THE NATURE OF INVESTMENTS WOULD BE OF NO RELEVANT WHILE COMPUTING DISALLOWANCE U/S 14A. THEREFORE, THE PLEA AS RAISED BY LD. SR. COUNSEL ON THESE LINES WOULD ALSO BE OF NO HELP TO THE ASSESSEE. 4.6 HOWEVER, IN T ERMS OF THE DECISIONS OF SPECIAL BENCH OF THE TRIBUNAL RENDERED IN ACIT VS. VIREET INVESTMENT (P) LTD. [ 82 TAXMANN.COM 415], WE FIND STRENGTH IN THE PLEA OF SR. COUNSEL THAT ONLY EXEMPT INCOME YIELDING INVESTMENTS WERE TO BE CONSIDERED FOR THE PURPOSE OF COMPUTATION OF DISALLWAONCE U/S 14A. DRAWING ANALOGY FROM THE DECISION OF HONBLE SUPREME COURT RENDERED IN MAXOPP INVESTMENT LTD. VS. CIT [SUPRA), WE ALSO FIND STRENGTH IN THE PLEA THAT THE QUANTUM OF DISALLOWANCE COULD NOT EXCEED THE EXEMPT INCOME EARNED BY THE ASSESSEE DURING THE IMPUGNED AY. FURTHER, THOSE INVESTMENTS WHICH WERE NOT CAPABLE OF YIELDING ANY EXEMPT INCOME WERE ALSO TO BE EXCLUDED WHILE ARRIVING AT THE DISALLOWANCE. 8 ITA NO S . 5239/MUM/2018 & 5240 / MUM/2018 ASSESSMENT YEAR S : 2012 - 13 AND 2013 - 1 4 4.7 KEEPING THE ABOVE PRINCIPLES IN MIND, WE HAVE PERUSED THE NATURE OF I NVESTMENTS HELD BY THE ASSESSEE WHICH ARE EXTRACTED AT PAGE - 14 OF THE IMPUGNED ORDER. WE FIND THAT THE INVESTMENTS HAVE BEEN CLASSIFIED BY THE ASSESSEE AS STRATEGIC INVESTMENTS, STOCK - IN - TRADE & INVESTMENT IN OTHER SHARES/VENTURE CAPITAL FUND. THE ASSESSEE HAS ALREADY OFFERED SUO - MOTO DISALLWAONCE @ 0.5% AGAINST INVESTMENT IN OTHER SHARES/VENTURE CAPITAL FUND AND THEREFORE, THERE IS NO DISPUTE AGAINST THIS CATEGORY OF INVESTMENT. THEREFORE, THE DISALLOWANCE UNDER DISPUTE IS AGAINST STRATEGIC INVESTMENT AND STOCK - IN - TRADE. IN THE ABSENCE OF ADEQUATE DATA BEFORE US, WE DIRECT THE LD. AO TO COMPUTE DISALLOWANCE @ .5% AGAINST STRATEGIC INVESTMENT AND STOCK - IN - TRADE AFTER EXCLUDING THERE FROM THOSE INVESTMENTS WHICH HAVE NOT YIELDED ANY EXEMPT INCOME DURING THE I MPUGNED AY OR WHICH WERE NOT, AT ALL, CAPABLE OF YIELDING ANY EXEMPT INCOME SUBJECT TO A FURTHER CONDITION THAT OVERALL DISALLOWANCE , IN NO CASE, SHALL EXCEED EXEMPT INCOME OF RS. 131.46 LACS EARNED BY THE ASSESSEE DURING THE IMPUGNED AY. THIS GROUND STAN D PARTLY ALLOWED IN TERMS OF OUR ABOVE ORDER. 8. SINCE, THE ISSUES INVOLVED IN THE PRESENT CASE IS COVERED BY THE DECISION S OF THE COORDINATE BENCH ES IN ASSESSEES OWN CASE S AND THE CASE OF KOTAK SECURUTIES LIMITED, VS. DCIT DISCUSSED ABOVE , WE RESPECTFU LLY FOLLOWING THE DECISIONS OF THE COORDINATE BENCH ES AFORESAID, DIRECT THE AO TO RE - COMPUTE THE DISALLOWANCE IN TERMS OF THE DECISION RENDERED BY THE COORDINATE BENCH IN ITA NO 3424/MUM/2016 AND 6666/MUM/2016 DISCUSSED ABOVE. ACCORDINGLY WE PARTLY ALLOW T HE ASSESSEES APPEAL. ITA NO. 5240 /MUM/2018 (ASSESSMENT YEAR: 2013 - 2014 ) THE FACTS OF THE CASE AND THE ISSUE S INVOLVED IN THE PRESENT APPEAL ARE IDENTICAL TO THAT OF THE ASSESSEES APPEAL PERTAINING TO THE ASSESSMENT YEAR 2012 - 13 AFORESAID, EXCEPT THE A MOUNT OF DISALLOWANCE CONFIRMED BY THE LD. CIT(A). SINCE WE HAVE PARTLY ALLOWED THE APPEAL OF THE ASSESSEE FOR THE 9 ITA NO S . 5239/MUM/2018 & 5240 / MUM/2018 ASSESSMENT YEAR S : 2012 - 13 AND 2013 - 1 4 ASSESSMENT YEAR 2012 - 13, OUR FINDINGS IN THE SAI D APPEAL APPLY MUTATIS MUTANDIS TO THE ASSESSEES APPEAL PERTAINING TO THE ASSESSMENT YEAR 20 13 - 14. IN THE RESULT, APPEAL S FILED BY THE ASSESSEE FOR ASSESSMENT YEAR S 2012 - 13 AND 2013 - 14 ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH D ECEMBER , 2019 . SD/ - SD/ - ( PRAMOD KUMAR ) ( RAM LAL NEGI ) VICE PRESIDENT JUDICIAL MEMBER MUMBAI ; DATED: 13 / 12 / 201 9 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI