DCIT, Bangalore V. Shri. Mahendra Kumar, Bangalore

ITA 579/BANG/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73399 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 01-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BIJOY KUMAR PANDADR
• Assessee Lawyers: B P GANDHI
• Section: 14A; 194C

Judgement Text

ITA NO.579 OF 2012 MAHENDRA KUMAR BANGALORE PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE A BENCH, BANGALORE BEFORE SHRI GEORGE GEORGE K. JUDICIAL MEMBER AND SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.579/BANG/2012 (ASSESSMENT YEAR: 2008-09) DY. COMMISSIONER OF INCOME TAX, CIRCLE 5(1) VI FLOOR, UNITY BUILDING ANNEXE, MISSION ROAD, P.KALINGA RAO BANGALORE-72 VS. SHRI MAHENDRA KUMAR, PROP: M/S.MK SILKS & SAREES, NO.23, 2 ND FLOOR, NM LANE, JM ROAD CROSS BANGALORE PAN: ACKPM 4053 D (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI BIJOY KUMAR PANDA,(DR) ASSESSEE BY: SHRI B.P. GANDHI, ADVOCATE DATE OF HEARING: 11/03/2014 DATE OF PRONOUNCEMENT: 14/03/2014 O R D E R PER GEORGE GEORGE K. J.M. THIS APPEAL AT THE INSTANCE OF THE REVENUE IS DIRE CTED AGAINST THE CIT (A)S ORDER DATED 21.12.2012. THE R ELEVANT ASSESSMENT YEAR IS 2008-09. 2. THE ASSESSEE HAS RAISED EIGHT GROUNDS OF APPEAL. THE FIRST GROUND IS GENERAL IN NATURE AND NO SPECIFIC ADJUDIC ATION IS CALLED FOR. HENCE GROUND NO.1 IS DISMISSED. GROUND NOS. 2 & 3 RELATE TO THE DISALLOWANCE MADE U/S 40(A)(IA) OF THE ACT. GRO UND NOS. 4 & 5 RELATES TO DISALLOWANCE OF REBATE AND DISCOUNT. G ROUND NOS. 6 TO 8 RELATES TO DISALLOWANCE OF INTEREST AS NOT REL ATING TO THE BUSINESS. ITA NO.579 OF 2012 MAHENDRA KUMAR BANGALORE PAGE 2 OF 10 3. WE SHALL PROCEED TO DEAL WITH THE CASE, ISSUE-WI SE AS UNDER: DISALLOWANCE U/S 40(A)(IA) OF THE ACT (GROUND NOS. 2 & 3) : 4. THE GROUNDS RAISED BY THE REVENUE RELATING TO TH E ABOVE ISSUE NAMELY GROUND NOS. 2 & 3 READ AS FOLLOWS: 2. THE LEARNED CIT (A) HAS ERRED IN DELETING THE ADDITION TO THE EXTENT OF RS.44,86,296/- MADE BY TH E ASSESSING OFFICER U/S 40(A)(IA). 3. THE LEARNED CIT (A) HAS ERRED IN NOT APPRECIATIN G THE FACT THAT THE ASSESSEE HAD NOT FURNISHED DETAIL S AND EVIDENCES IN SUPPORT OF HIS CLAIM THAT THEY WER E PURCHASE BILLS AND ALSO, THESE AMOUNTS HAD NOT BEEN INCLUDED IN THE VAT 100 RETURNS THROUGHOUT THE YEAR AS PURCHASES. 4.1 THE FACTS IN BRIEF TO THE ABOVE ISSUE ARE AS FO LLOWS: THE ASSESSING OFFICER HAD DISALLOWED EXPENDITURE AMOUNTING TO RS.62,80,787/- BY INVOKING THE PROVISI ONS OF SECTION 40(A)(IA) OF THE ACT. THIS EXPENDITURE WAS DEBITED AS INTER-STATE PURCHASE OF SILK SAREES. ACCORDING TO T HE ASSESSING OFFICER, THIS EXPENDITURE WAS LIABLE FOR TAX DEDUCT ION AT SOURCE U/S 194C OF THE ACT AND SINCE THE TAX WAS NOT DEDUC TED ON THE SAME, THE SAID EXPENDITURE CANNOT BE ALLOWED AS A D EDUCTION IN VIEW OF THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 4.2 AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A). THE CONTENTIONS OF THE ASSESSEE RAISED BEFORE THE F IRST APPELLATE AUTHORITY IS REPRODUCED BELOW FOR READY REFERENCE: ITA NO.579 OF 2012 MAHENDRA KUMAR BANGALORE PAGE 3 OF 10 PURCHASE MADE FROM RATIRAM RAMVINOD SAREES (P) LTD, KOLKATA FOR RS.41,77,206/-; PURCHASE MADE FROM SHANKAR SELECTION (P) LTD, KOLKATA RS.21,430/- AND PURCHASE FROM M/S ROOP RANJAN, AHMEDABAD OF RS.2,87,668/-. THESE PURCHASES WORKS OUT TO RS.44,86,296/-. HENCE IN VIEW OF CONFIRMATION THAT PAYMENTS ARE FOR SALES OF SAREES BY THEM, NO TDS IS APPLICABLE AND HENCE THE DISALLOWANCE OF RS.44,86,296/- FROM RS.48,85,586/- BE ALLOWED AND REMAINING RS.3,99,290/- MAY BE SUSTAINED FOR NON DEDUCTION OF TDS THOUGH PAYMENT MADE FOR MANUFACTURING AND SUPPLY BY USING MATERIAL PURCHASED FROM OTHERS WOULD NOT WORK COVERED BY SECTION 194C. THE LEARNED DCIT HAS DISALLOWED THE PROCESSING CHARGES RS.13,95,201/-. APPELLANT ADMITS THAT PAYMENTS RELATE TO EMBROIDERY CHARGES PAID AND TDS IS NOT DEDUCTED. HOWEVER, APPELLANT SUBMITS WORK OF EMBROIDERY INCLUDES THE LABOUR AND MATERIAL PURCHASED BY THE PARTIES. WORK OF EMBROIDERY OF GOO DS TO THE REQUIRED SPECIFICATION IS NOT DEFINED IN THE DEFINITION OF WORK UNDER EXPLANATION TO 194C. HOWEVER, CLAUSE (E) TO EXPLANATION TO 194C IS INTRODUCED FROM 1.4.2009. IN THIS BEHALF IT IS SUBM ITED THAT THE CLAUSE (E) WAS NOT ON THE STATUTE BOOK DUR ING THE YEAR F.Y 2007-08. IT HAS BEEN INTRODUCED DURING THE YEAR F.Y 2007-08. IN OTHER WORDS, THE WORK OF MANUFACTURING AND SUPPLYING THE PRODUCT TO THE REQUIREMENT OF THE CUSTOMER BY USING MATERIAL PURCHASED FROM A PERSON OTHER THAN SUCH CUSTOMER WAS NOT INCLUDED IN DEFINITION OF WORK. THE QUESTION THEREFORE, IS WHETHER THE SAID AMENDMENT IS CLARIFICATORY AND THUS WHETHER EVEN IN THE ABSENCE OF SUCH A LAW DURING 2007-08 THE WORK OF MANUFACTURE AND SUPPLYING OF THE PRODUCT BY PURCHASE OF MATERIAL FROM OTHER PERSON CAN BE READ IN THE DEFINITION OF WORK. IT IS IN THIS BEHALF APPELL ANT CONTENDS THAT TDS IS NOT DEDUCTIBLE. APPELLANT BONAFIDE BELIEVES THAT WORK OF MANUFACTURE AND SUPPLY NOT BEING INCLUDED IN THE DEFINITION OF WORK , TDS IS NOT DEDUCTIBLE. AND THEREFORE, PAYMENTS ARE NOT DISALLOWABLE UNDER SECTION 40(A)(IA). HOWEVER, APPELLANT SUBMITS THAT IF THE APPELLATE AUTHORITY I S OF THE VEIW THAT SECTION 194C IS APPLICABLE AND THAT ITA NO.579 OF 2012 MAHENDRA KUMAR BANGALORE PAGE 4 OF 10 SUBSEQUENT AMENDMENT IN INSERTION OF CLAUSE (E) IN THE EXPLANATION TO SECTION 194C BEING CLARIFICATORY IN NATURE IN SUCH AN EVENT, THE DISALLOWANCE OF RS.13,95,921/- (SIC) MAY BE RETAINED. 4.3 OUT OF THE DISALLOWANCE OF RS.62,80,787/- MADE BY THE ASSESSING OFFICER, THE CIT (A), GRANTED A RELIEF OF RS.44,86,296 AND DISALLOWANCE U/S 40(A)(IA) OF THE ACT WAS RESTR ICTED TO RS.17,94,481/-. THE RELEVANT FINDINGS OF THE CIT (A ) READ AS FOLLOWS: 3.4 AS REGARDS, THE AMOUNT OF RS.48,85,586/- CLAIMED BY THE APPELLANT TO BE PAYMENTS TOWARDS INTER-STATE PURCHASE OF SILK SAREES AND HELD BY THE ASSESSING OFFICER TO BE ONLY WORK AND DELIVERY BILL S AND NOT SALE BILLS, IT IS CLAIMED THAT A SUM OF RS.44,85,686/- COMPRISING TRANSACTION FROM M/S RATIRAM RAMVINOD SAREES (P) LTD FOR RS.41,77,206/-, FROM M/S.SHANKAR SELECTION (P) LTD FOR RS.21,430/- AND FROM M/S.ROOP RANJAN, AHMEDABAD FOR RS.2,87,668/- ARE INTER-STATE PURCHASES. I HAVE VERIFIED FROM THE BILLS PRODUCED FOR VERIFICATION A ND ALSO CONFIRMATIONS FROM THE CONCERNED PARTIES THAT THESE ARE INTER-STATE PURCHASES AND CANNOT BE CLAIM ED AS EMBROIDERY CHARGES AND THEREFORE, SECTION 194C I S NOT APPLICABLE. 3.5 AS REGARD THE BALANCE SUM OF RS.3,99,290/- THE APPELLANT HAS NOT BEEN ABLE TO SUBSTANTIATE THAT TH ESE AMOUNTS ARE PURCHASES AND NOT LIABLE FOR TDS AND HAS, THEREFORE, AGREED TO THE DISALLOWANCE OF THE S AME. THEREFORE, DISALLOWANCE TO THE EXTENT OF RS.3,99,29 0/- IS UPHELD. AS THE SUM OF RS.44,86,296/- OUT OF THE DISALLOWANCE OF RS.48,85,586/- REPRESENTS AGGREGATE OF THE PAYMENTS FRO SALE OF SAREES MADE BY THE PART IES MENTIONED ABOVE IN RESPECT OF WHICH TDS PROVISIONS ARE NOT ATTRACTED, NO DISALLOWANCE IS CALLED FOR AN D HENCE, THE DISALLOWANCE IS RESTRICTED TO RS.3,99,29 0/- VIDE PARA 3.6 SUPRA. 3.6 AS REGARDS RS.13,95,201/-CLAIMED AS PROCESSING CHARGES AND DISALLOWED U/S 40(A)(IA) BEING ITA NO.579 OF 2012 MAHENDRA KUMAR BANGALORE PAGE 5 OF 10 EMBROIDERY CHARGES NOT SUBJECTED TO TDS AS REQUIRED BY LAW, IT IS CLEAR THAT THIS AMOUNT OF RS.13,95,20 1/- IS TOWARDS WORKS CONTRACT FOR WHICH SECTION 194C IS ATTRACTED. IN THE ABSENCE OF PAYMENT OF TDS, SECTIO N 40(A)(IA) IS ATTRACTED AND THE SAME CANNOT BE ALLOW ED AS EXPENDITURE. THE APPELLANT HAS ALSO ACCEPTED THE SAME BY NOT PRESSING THE GROUND AS IS EVIDENT FROM THE ABOVE SUBMISSIONS. THIS DISALLOWANCE IS, THEREFORE, UPHELD. 3.7 THE TOTAL DISALLOWANCE U/S 40(A)(IA) IS RS.13,95,201/- PLUS RS.3,99,290/- I.E. RS.17,94,481 . THE APPELLANT GETS A RELIEF OF RS.44,86,296/- AS BE ING PURCHASES NOT LIABLE FOR TDS. 4.4 THE REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US. THE LEARNED DR SUPPORTED THE ORDER OF THE ASSESSING OFF ICER. PER CONTRA, THE LEARNED AR REITERATED THE SUBMISSIONS M ADE BEFORE THE INCOME TAX AUTHORITIES AND SUPPORTED THE FINDIN GS/ CONCLUSIONS OF THE CIT (A). 4.5 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE CIT (A) HAS CATEGORICALLY H ELD THAT A SUM OF RS.44,86,296/- ARE INTER-STATE PURCHASES AND SEC TION 194C IS NOT APPLICABLE. THE CIT (A) CAME TO THE ABOVE CONCL USION, AFTER VERIFYING THE PURCHASE BILLS AND ALSO THE CONFIRMAT IONS FROM THE CONCERNED PARTIES THAT THESE SALES WERE INTER-STATE PURCHASES. A SUM OF RS.44,85,686/- COMPRISING OF PURCHASE BY TH E ASSESSEE FROM M/S. RATIRAM RAMVINOD SAREES (P) LTD, FOR RS.4 1,77,206/- FROM SHANKAR SELECTION (P) LTD, FOR RS.21,430/- AN D FROM M/S ROOP RANJAN, AHMEDABAD FOR RS.2,87,668/- ARE NOTHIN G, BUT INTER-STATE PURCHASES AFFECTED BY THE ASSESSEE. THE FINDING OF THE LEARNED CIT (A) HAS NOT BEEN DISPELLED BY THE REVEN UE IN ANY ITA NO.579 OF 2012 MAHENDRA KUMAR BANGALORE PAGE 6 OF 10 MANNER WHATSOEVER AND HENCE WE CONFIRM THE STAND TA KEN BY HER. 4.6 HENCE GROUND NOS. 2 AND 3 RAISED BY THE REVENUE ARE REJECTED. DISALLOWANCE OF REBATE/DISCOUNT (GROUND NOS. 4 & 5) : 5. THE GROUNDS RAISED BY THE REVENUE RELATING TO TH E ABOVE ISSUE NAMELY GROUND NOS. 4 & 5 AS FOLLOWS: 4. THE LEARNED CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.6,06,915/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISCOUNT DISALLOWED. 5. THE LEARNED CIT (A) HAS ERRED IN NOT APPRECIATIN G THE FACT THAT THE NET PROFIT BEFORE DEDUCTING REBAT E AND DISCOUNT WAS 4% AND ALSO THAT THE REBATE & DISCOUNT ALLOWED RANGED FROM 5% TO 12% WHICH WAS FOUND TO BE MORE THAN THE NET PROFIT OF 4% AND THEREFORE, TH E SAME WAS DISALLOWED AND BROUGHT TO TAX. 5.1 BRIEF FACTS OF THE ISSUE ARE AS FOLLOWS: THE ASSESSEE HAD DEBITED A SUM OF RS.25,03,323/- AS REBATE AND DISCOUNTS. ASSESSING OFFICER CONCLUDED T HE ASSESSMENT BY DISALLOWING THE DISCOUNT EXCEEDING 4% OF EACH OF THE SALE BILL. SUCH DISALLOWANCE WAS TO THE TUNE OF RS.6,06,915/. THE REASONING OF THE ASSESSING OFFICER WAS THAT THE ASSESSEE NET PROFIT BEFORE DEDUCTION OF DISCOUNTS AND REBATE WAS 4% AND THE ASSESSEE HAS NOT FURNISHED CONFIRMATION FROM THE DE BTORS REGARDING THE REBATE ALLOWED. 5.2 IN APPEAL, THE CIT (A) DELETED THE DISALLOWANCE MADE. THE REASONING OF THE CIT (A) IS REPRODUCED BELOW FOR RE ADY REFERENCE: 4.3 I HAVE EXAMINED THE ISSUE AND PERUSED THE RECORDS. I FIND THAT THERE IS NO BASIS FOR A RANDOM RATE TO BE APPLIED AS HAS BEEN DONE BY THE ASSESSING OFFICER. THE GENUINENESS OF THE SAME HAS NOT B EEN ITA NO.579 OF 2012 MAHENDRA KUMAR BANGALORE PAGE 7 OF 10 DOUBTED. DISCOUNTS AND REBATES ARE COMMON IN THE NATURE OF BUSINESS OF THE APPELLANT. AS PER COPIES OF ACCOUNTS FURNISHED BY THE APPELLANT, THESE ARE ACCOUNTED FOR ON THE BASIS OF SALE BILLS AND REFLEC TED IN EACH PARTYS ACCOUNT. THEREFORE, THE DISALLOWANCE MADE IS UNCALLED FOR AND THE SAME IS DELETED. 5.3 REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US. BOTH THE LEARNED DR AND AR WERE DULY HARD. 5.4 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. DISCOUNT AND REBATE ARE COMMON IN THIS LINE OF BUSINESS. ASSESSING OFFICER HAS NOT DOUBTED THE GENUINENESS OF THE REBATE AND DISCOUNT. ASSESSING OFFICER MADE AN ADHOC DISALLOWANCE OF DISCOUNT AND REBATE OF A SUM EXCEED ING 4% OF DISCOUNT GRANTED IN A SALE INVOICE. THE CIT (A) AFT ER EXAMINING THE ACCOUNTS OF THE ASSESSEE HAD HELD THAT THE DISC OUNTS ARE ACCOUNTED ON THE BASIS OF SALE BILL AND REFLECTED I N EACH PARTYS ACCOUNT. THESE FINDINGS OF THE CIT (A) DOES NOT CAL L FOR ANY INTERFERENCE, HENCE WE CONFIRM THE ORDER OF THE CIT (A) ON THIS ISSUE. 5.5 THEREFORE, GROUNDS 4 AND 5 RAISED BY THE REVENU E ARE DISMISSED. DISALLOWANCE OF INTEREST AS NOT RELATING TO BUSINES S RS.8,99,631/- (GROUND NOS. 6 TO 8): 6. THE GROUNDS RAISED BY THE REVENUE RELATING TO TH E ABOVE ISSUE NAMELY GROUND NOS. 6 TO 8 ARE AS FOLLOWS: 6. THE LEARNED CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.8,99,631/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST DISALLOWED. ITA NO.579 OF 2012 MAHENDRA KUMAR BANGALORE PAGE 8 OF 10 7. THE LEARNED CIT (A) HAS ERRED IN HOLDING THAT TH E ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO SUPPORT THE VIEW THAT THE INTEREST HAS BEEN PAID FOR EARNING INCOME, WHICH IS EXEMPT FROM INCOM E- TAX. 8. THE LEARNED CIT (A) HAS NOT APPRECIATED THE FACT THAT THE DISALLOWANCE OF INTEREST HAS BEEN RIGHTLY WORKED OUT AS PER THE PROVISIONS OF RULE 8D OF INCO ME- TAX RULES, 1962. 6.1 THE ASSESSING OFFICER IN THE COURSE OF THE ASSE SSMENT PROCEEDINGS NOTICED FROM THE EXAMINATION OF BALANCE SHEET THAT THERE WERE ASSETS WHICH WERE NON-BUSINESS, NON-EARN ING AND EARNING BUT NOT TAXABLE IN CHARACTER. MOREOVER, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAD NOT M AINTAINED DETAILS OF FUND FLOW BETWEEN THE SOURCE AND THE INV ESTMENT. THEREFORE, THE ASSESSING OFFICER WORKED OUT THE INT EREST NOT ATTRIBUTABLE TO THE INCOME FROM NON TAXABLE ASSETS AT RS.8,99,631/- AND DISALLOWED THE SAME. 6.2 ON APPEAL BEFORE THE CIT (A), THE ASSESSEE RAIS ED THE FOLLOWING CONTENTIONS: NO INTEREST IS PAID TO TRADE CREDITORS OF RS.1,28,02,067/-. AND HENCE THE CONTENTION THAT IT IS TO BE REDUCED FROM BUSINESS ASSETS IS UNTENABLE. TRADE CREDITORS OF RS.1,28,02,067/- HAVE NOT BEEN PAID ANY INTEREST AND HENCE NO EXPENDITURE ON THIS AMOUNT IS INCURRED. THE QUESTION U/S 14A OF THE ACT WHETHER LOANS ON WHICH INTEREST IS PAID IS UTILISED IN BUSINESS INVESTMENT OR DIVERTED FOR EARNING EXEMPTE D INCOME. FURTHER, THE APPELLANTS INVESTMENT IN IMMOVABLE PROPERTY OF RS.1,54,44,700/- AND IN LAND AT GANDHAKAVALU AND RS.20,17,500/- ARE FOR LAND DEVELOPMENT BUSINESS PURPOSE. INVESTMENT IN THESE ITA NO.579 OF 2012 MAHENDRA KUMAR BANGALORE PAGE 9 OF 10 LANDS IS NOT FOR EARNING EXEMPTED INCOME. HENCE THE RE IS NO INVESTMENT MADE OF BORROWED MONEY ON WHICH INTEREST IS PAID IS USED FOR EARNING EXEMPTED INCOM E 6.3 THE LEARNED CIT (A) DELETED THE DISALLOWANCE. R ELEVANT FINDINGS OF THE CIT (A) READ AS FOLLOWS: 5.4 IN MY CONSIDERED OPINION, THERE IS MERIT IN TH E SUBMISSIONS MADE ON BEHALF OF THE APPELLANT. THE REASON FOR THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS THAT THE INTEREST IS ATTRIBUTABLE TO EAR NING INCOME FROM NON-TAXABLE ASSETS. AT ANOTHER PLACE, THE ASSESSING OFFICER SAYS THAT IT REPRESENTS INCOM E FROM NON-BUSINESS ASSETS. WHAT IS DISALLOWABLE U/S 14A IS THE EXPENDITURE ATTRIBUTABLE TOWARDS INCOME, WHICH IS NOT TAXABLE UNDER THE I.T. ACT. TH E ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO SUPPORT THE VIEW THAT THE INTEREST HAS BEEN PAID FOR EARNING INCOME, WHICH IS EXEMPT FROM INCOME-TAX. IN THE CIRCUMSTANCES, I AM UNABLE TO UPHOLD THE DISALLOWANCE OF RS.8,99,631/- AND I, THEREFORE, DELETE THE SAME. 6.4 REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US. THE LEARNED DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. PE R CONTRA, THE LEARNED AR SUPPORTED THE CONCLUSIONS OF THE CIT (A) . 6.5 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AS RIGHTLY POINTED OUT BY THE C IT (A), DISALLOWANCE U/S 14A IS LIMITED TO EXPENDITURE ATTR IBUTABLE TOWARDS INCOME WHICH IS NOT LIABLE UNDER THE INCOME TAX ACT. THE ASSESSING OFFICER HAS NOT BROUGHT OUT ON RECORD ANY EVIDENCE THAT THE INTEREST EXPENDITURE HAS BEEN INC URRED BY THE ASSESSEE FOR EARNING EXEMPTED INCOME. THEREFORE, TH E ORDER OF THE CIT (A) DELETING THE DISALLOWANCE OF EXPENDITUR E AMOUNTING TO RS.8,99,631/- IS UPHELD. IT IS ORDERED ACCORDINGLY. ITA NO.579 OF 2012 MAHENDRA KUMAR BANGALORE PAGE 10 OF 10 6.6 HENCE GROUND NOS. 6 TO 8 RAISED BY THE REVENUE ARE REJECTED. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH MARCH, 2014. SD/- SD/- (D.KARUNAKARA RAO) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED 14 TH MARCH, 2014. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCHES, BANGALORE