ITO, New Delhi V. M/s. Magic Software Pvt. Ltd., Noida

ITA 5861/DEL/2014

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7356 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 30-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAILESH KUMAR
• Assessee Lawyers: DIVYANSHU AGARWAL
• Keywords: Depreciation; Earning of tax free income; Unabsorbed depreciation
• Section: 80HHC; 14A; 10B; 10

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH E, NEW DELHI BEFORE : SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 5861/DEL/2014 ASSESSMENT YEAR: 2011-12 INCOME - TAX OFFICER, WARD 6(1), NEW DELHI (APPELLANT) VS. MAGIC SOFTWARE PVT. LTD., 9 TH FLOOR, TOWER C, TECH BOULEWARD, PLOT NO. 6, SECTOR 127, NOIDA. PAN AACCM 8579M (RESPONDENT) APPELLANT BY SH. SHAILESH KUMAR SR. DR RESPONDENT BY SH. DIVYANSHU AGARWAL, ADVOCATE ORDER PER L.P. SAHU, A.M.: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER PASSED BY THE CIT(A)-IX, NEW DELHI DATED 12.08.2014 ON THE FOLLOW ING GROUNDS : 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED A RETURN OF INCOME ON 29.09.2011. THE ASSESSEE IS ENGAGED IN THE BUSIN ESS OF SOFTWARE DEVELOPMENT AND EXPORT SERVICES. THE CASE WAS SELEC TED FOR SCRUTINY AND STATUTORY NOTICES WERE SERVED UPON THE ASSESSEE. IN THE SCRUTINY PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE IS CL AIMING DEDUCTION U/S. 10A OF THE ACT AMOUNTING TO RS.6,35,35,675/-. THE ASSESSEE HAD TWO UNITS, VIZ., NON- DATE OF HEARING 26.11.2018 DATE OF PRONOUNCEMENT 15.01.2019 ITA NO. 5861/DEL/2016 2 STPI AND STPI. THE ASSESSEE IS DECLARING LOSS OF RS .3,56,99,918 FROM NON-STPI UNIT AND CLAIMING PROFIT OF RS.9,92,35,593/- FROM S TPI UNIT. THE ASSESSING OFFICER NOTED THAT WHILE CLAIMING DEDUCTION U/S. 10 A, THE ASSESSEE FAILED TO TAKE INTO CONSIDERATION THE BROUGHT FORWARD LOSSES/ DEPRECIATION. FROM THE PERUSAL OF TAX AUDIT REPORT, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS BUSINESS LOSS/DEPRECIATION OF RS.5,90,31,797/- AND AMOUNT CLAIMED BY THE ASSESSEE AS BUSINESS LOSSES/DEPRECIATION IS RS.6,33 ,65,023/-. THE DEDUCTION CAN BE GIVEN ONLY AFTER GETTING THE TOTAL INCOME, I .E., AFTER ADJUSTING THE LOSSES AVAILABLE TO THE ASSESSEE. IN THIS REGARD, THE ASSE SSEE FURNISHED REPLY AND RELIED ON VARIOUS DECISIONS. AFTER CONSIDERING THE DETAILED SUBMISSIONS OF THE ASSESSEE, THE AO RELIED ON THE DECISION OF APEX COU RT IN THE CASE OF HIMATSING KA SEIDE LTD. VS. CIT (CIVIL APPEAL NO. 1501 OF 200 8). ACCORDINGLY, BEFORE GIVING DEDUCTION U/S. 10A, THE ASSESSING OFFICER AD JUSTED THE BROUGHT FORWARD BUSINESS LOSSES AND UN-ABSORBED DEPRECIATION OF RS. 5,90,31,797/-. 3. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASS ESSEE HAS EARNED DIVIDEND OF RS.4,59,656/-, WHICH ARE NOT PART OF TH E TOTAL INCOME OF THE ASSESSEE AND THE ASSESSEE DID NOT DISALLOW ANY EXPE NSE IN RELATION TO EXEMPT INCOME WHILE COMPUTING THE TOTAL TAXABLE INCOME. TH E ASSESSEE HAS MADE FRESH INVESTMENT OF RS.5,54,57,280/- DURING THE YEA R UNDER CONSIDERATION. THEREFORE, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD PUT IN SOME EFFORTS ON BOTH THE COUNTS, FINANCIALLY AS WELL AS HUMAN RESOURCES IN DECIDING ABOUT THE INVESTMENTS AND IN BUYING THE INVESTMENTS AS WELL AS FOR EARNING EXEMPT INCOME. ACCORDINGLY, THE ASSESSING OFFICER DISALLOWED RS.4,51,433/- ITA NO. 5861/DEL/2016 3 U/S. 14A READ WITH RULE 8D. UNDER RULE 8D(2)(II), H E CALCULATED RS.3,12,793/- AND RULE 8D(2)(III) RS.1,38,640/-. 4. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE APPEALED BEFORE THE CIT(A), WHO AFTER CONSIDERING THE DETAIL ED SUBMISSIONS OF THE ASSESSEE, ALLOWED THE APPEAL OF THE ASSESSEE IN RES PECT OF ISSUE PERTAINING TO ADJUSTMENT OF BROUGHT FORWARD BUSINESS LOSSES AND U N-ABSORBED DEPRECIATION LOSS OF RS.5,90,31,797/-, GAVE A RELIEF OF RS.3,12, 793/- WITH RESPECT TO DISALLOWANCE MADE U/R 8D(2)(II) OF THE IT RULES. AG GRIEVED, THE REVENUE IS IN APPEAL BEFORE THE ITAT. 5. THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THE LD.CIT(A) HAS WRONGLY INTERPRETED THE PROV ISIONS OF SECTION 10A . THE EXEMPTION U/S. 10A SHOULD BE GIVEN AFTER CALCULATIN G TOTAL INCOME OF THE ASSESSEE WHICH HAS NOT BEEN DONE. THE CASE LAW RELI ED BY THE ASSESSING OFFICER IS SQUARELY COVERED IN FAVOUR OF THE REVENUE. THE I NTENTION OF THE LEGISLATURE HAS NOT BEEN CORRECTLY APPRECIATED BY THE LD. CIT(A ) FOR INTRODUCTION OF SECTION 10A. HE FURTHER SUBMITTED THAT RULE 8D CANNOT BE RE AD IN ISOLATION, BUT IT IS A MECHANISM FOR INCLUSION OF DISALLOWANCE U/S. 14A. I F THE ASSESSEE SATISFIED THE CONDITIONS OF RULE 8D, THE ASSESSING OFFICER IS BOU ND TO CALCULATE ACCORDING TO THE RULES. THE LD. CIT(A) HAS GIVEN RELIEF UNDER RU LE 8D(2)(II) WHERE THE ASSESSEE HAS INCURRED INTEREST EXPENDITURE OF RS.15 ,41,040/- DURING THE YEAR. THEREFORE, THE DISALLOWANCE MADE BY THE ASSESSING O FFICER HAS TO BE RESTORED. ITA NO. 5861/DEL/2016 4 6. ON THE OTHER HAND, THE LD. AR RELIED ON THE ORDE R OF THE LD. CIT(A) AND REITERATED THE SUBMISSIONS MADE BEFORE HIM. HE STAT ED THAT THE LD. CIT(A) HAS RIGHTLY CALCULATED THE DEDUCTION U/S. 10A. HE ALSO RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT V. YOKOGAW A INDIA LTD. (2017) 2SCC- 1 AND THE DECISION OF TRIBUNAL IN ITA NO. 5622/DEL/ 2010 FOR THE ASSESSMENT YEAR 2005-06. 7. AFTER HEARING BOTH THE SIDES AND PERUSING THE EN TIRE MATERIALS AVAILABLE ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW, WE OBSERVE THAT THE ASSESSEE HAS TWO UNITS ONE IS STPI AND OTHER NON- STPI UNIT. THE LD. CIT(A) HAS RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEE BY H OLDING THAT THE BROUGHT FORWARD BUSINESS LOSS AND UNABSORBED DEPRECIATION O F NON-ELIGIBLE BUSINESS UNIT IS NOT ALLOWED TO BE ADJUSTED WHILE CALCULATIN G THE EXEMPTION U/S. 10A. THE LD. AR HAS ALSO PLACED RELIANCE ON THE JUDGMENT OF DELHI TRIBUNAL IN ITA NO. 5622/DEL/2010 FOR THE ASSESSMENT YEAR 2005-06 W HEREIN SIMILAR ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AFTER FO LLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. YOGOKA WA INDIA LTD. (SUPRA) AND CIT V. JP MORGAN SERVICE INDIA PVT. LTD. 393 ITR 24 (SC). THE RELEVANT FINDINGS OF THE TRIBUNAL READ AS UNDER : 15. AO WHILE COMPUTING THE DEDUCTION U/S 10A OF THE ACT CONCLUDED THAT THE SAME IS REQUIRED TO BE COMPUTED AFTER SETTING OFF BROUGHT F ORWARD LOSSES OF RS.34,99,523/- AND UNABSORBED DEPRECIATION OF RS.2,05,013/-. HOWEV ER, THIS CONTROVERSY HAS ALREADY BEEN SET AT REST BY HONBLE SUPREME COURT I N CASE CITED AS CIT VS. YOGOKAWA INDIA LTD. 391 ITR 274 (SC) AND CIT VS. JP MORGAN SERVICES INDIA PVT. LTD. 393 ITR 24 (SC). HONBLE SUPREME COURT IN CIT VS. YOGOK AWA INDIA LTD. (SUPRA) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING TH AT IN CASE OF 100% EXPORT ORIENTED UNDERTAKING, DEDUCTION IS TO BE GRANTED BY COMPUTIN G GROSS TOTAL INCOME OF ELIGIBLE ITA NO. 5861/DEL/2016 5 UNDERTAKING UNDER CHAPTER IV AND NOT AT STAGE OF CO MPUTATION OF TOTAL INCOME UNDER CHAPTER VI OF THE ACT. OPERATIVE PART OF THE JUDGME NT IN CIT VS. YOGOKAWA INDIA LTD. (SUPRA) IS AS UNDER :- SECTION 10A OF THE INCOME-TAX ACT, 1961AS ORIGINA LLY INTRODUCED, PROVIDED THAT ANY PROFITS AND GAINS DERIVED BY AN ASSESSEE F ROM AN INDUSTRIAL UNDERTAKING TO WHICH THE SECTION APPLIED SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE. THE AMENDMENT OF THE SECTIO N BY THE FINANCE ACT, 2000 WITH EFFECT FROM APRIL 1, 2001, SPECIFICALLY USES T HE WORDS 'DEDUCTION OF PROFITS AND GAINS DERIVED BY AN ELIGIBLE UNIT ... FROM THE T OTAL INCOME OF THE ASSESSEE'. THE RETENTION OF SECTION 10A IN CHAPTER III OF THE ACT AFTER THE AMENDMENT MADE BY THE FINANCE ACT, 2000 WOULD BE MERELY SUGGES TIVE AND NOT DETERMINATION OF WHAT IS PROVIDED BY THE SECTION AS AMENDED, IN CONTRAST TO WHAT WAS PROVIDED BY THE UNAMENDED SECTION. THE TRU E AND CORRECT PURPORT AND EFFECT OF THE AMENDED SECTION WILL HAVE TO BE C ONSTRUED FROM THE LANGUAGE USED AND NOT MERELY FROM THE FACT THAT IT HAS BEEN R ETAINED IN CHAPTER III. THE INTRODUCTION OF THE WORD 'DEDUCTION' IN SECTION 10A BY THE AMENDMENT, IN THE ABSENCE OF ANY CONTRARY MATERIAL, AND IN VIEW OF TH E SCOPE OF THE DEDUCTIONS CONTEMPLATED BY SECTION 10A HAS TO BE UNDERSTOOD AS EMBODYING A CLEAR ENUNCIATION OF THE LEGISLATIVE DECISION TO ALTER TH E NATURE OF THE SECTION FROM ONE PROVIDING FOR EXEMPTION TO ONE PROVIDING FOR DE DUCTIONS. THOUGH THE DIFFERENCE BETWEEN THE TWO EXPRESSIONS 'E XEMPTION' AND 'DEDUCTION', BROADLY MAY APPEAR TO BE THE SAME, I.E., IMMUNITY FROM TAXATION, THE PRACTICAL EFFECT OF IT IN THE LIGHT OF THE SPEC IFIC PROVISIONS CONTAINED IN DIFFERENT PARTS OF THE ACT WOULD BE WHOLLY DIFFERENT . THE ABOVE IMPLICATIONS, WOULD BE OBVIOUS WHERE LOSS MAKING ELIGIBLE UNITS OR N ON-ELIGIBLE ASSESSEES SEEK THE BENEFIT OF ADJUSTMENT OF LOSSES AGAINST PROFITS MADE BY ELIGIBLE UNITS. SUB-SECTION (4) OF SECTION 10A WHICH PROVIDES FOR P RO RATA EXEMPTION, NECESSARILY INVOLVING DEDUCTION OF THE PROFITS ARIS ING OUT OF DOMESTIC SALES, IS ONE INSTANCE OFF DEDUCTION PROVIDED BY THE AMENDMEN T. PROFITS OF AN ELIGIBLE UNIT PERTAINING TO DOMESTIC SALES WOULD HAVE TO ENT ER INTO THE COMPUTATION UNDER THE HEAD 'PROFITS AND. GAINS FROM BUSINESS' I N CHAPTER IV AND BE DENIED THE BENEFIT OF DEDUCTION. THE PROVISIONS OF SUB-SECTI ON (6) OF SECTION 10A, AS AMENDED BY THE FINANCE ACT, 2003, GRANTING THE BENEF IT OF ADJUSTMENT OF LOSSES AND UNABSORBED DEPRECIATION, ETC., COMMENCING FROM T HE YEAR 2001-02 ON COMPLETION OF THE PERIOD OF TAX HOLIDAY ALSO VIRTUA LLY WORK AS A DEDUCTION WHICH HAS TO BE WORKED OUT AT A FUTURE POINT OF TIME, NAME LY, AFTER THE EXPIRY OF THE ITA NO. 5861/DEL/2016 6 PERIOD OF TAX HOLIDAY. THE ABSENCE OF ANY REFERENCE IN CHAPTER VI OF THE ACT TO DEDUCTION UNDER SECTION 10A CAN BE UNDERSTOOD BY ACK NOWLEDGING THAT ANY SUCH REFERENCE OR MENTION WOULD HAVE BEEN A REPETITI ON OF WHAT, HAS ALREADY BEEN PROVIDED IN SECTION 10A. THE PROVISIONS OF SECT IONS 80HHC AND 80HHE OF THE ACT PROVIDING FOR SOMEWHAT SIMILAR DEDUCTIONS W OULD BE WHOLLY IRRELEVANT AND REDUNDANT IF DEDUCTIONS UNDER SECTION 10A WERE TO BE MADE AT THE STAGE OF OPERATION OF CHAPTER VI OF THE ACT. THE RETENTION O F THE PROVISIONS OF THE ACT, I.E., SECTIONS 80HHC AND 80HHE, DESPITE THE AMENDMENT OF SECTION 10A INDICATES THAT SOME ADDITIONAL BENEFIT TO ELIGIBLE SECTION 10A UNITS, NOT CONTEMPLATED BY SECTIONS 80HHC AND 80HHE, WAS INTENDED BY THE LEGIS LATURE. SUCH A BENEFIT CAN ONLY BE UNDERSTOOD BY A LEGISLATIVE MANDATE TO U NDERSTAND THAT THE STAGES FOR WORKING OUT THE DEDUCTIONS UNDER SECTIONS 10A A ND 80HHC AND 80RHE ARE SUBSTANTIALLY DIFFERENT. FROM A READING OF THE RELEVANT PROVISIONS OF SECTIO N 10A, IT IS MORE THAN CLEAR THAT THE DEDUCTION CONTEMPLATED THEREIN IS QU A THE ELIGIBLE UNDERTAKING OF AN ASSESSEE STANDING ON ITS OWN AND WITHOUT REFE RENCE TO THE OTHER ELIGIBLE OR NON-ELIGIBLE UNITS OR UNDERTAKINGS OF THE ASSESSEE. THE BENEFIT OF DEDUCTION IS GIVEN BY THE ACT TO THE INDIVIDUAL UNDERTAKING AND RESULTANTLY FLOWS TO THE ASSESSEE. CIRCULAR NO. 794, DATED AUGUST 9, 2000 ST ATES IN PARAGRAPH 15.6 THAT THE EXPORT TURNOVER AND THE TOTAL TURNOVER FOR THE PURPOSES OF SECTIONS 10A AND 10B SHALL BE OF THE UNDERTAKING LOCATED IN SPECIFIED ZONES OR 100 PER CENT EXPORT ORIENTED UNDERTAKINGS, AS THE CASE MAY BE, AN D THIS SHALL NOT HAVE ANY MATERIAL RELATIONSHIP WITH THE OTHER BUSINESS OF TH E ASSESSEE OUTSIDE THESE ZONES OR UNITS FOR THE PURPOSES OF THIS PROVISION. IF THE SPECIFIC PROVISIONS OF THE ACT (THE FIRST PROVISO TO SUB-SECTION (1) OF SECTION 10A AND SUB-SECTIONS (1A) AND (4) OF SECTION 10A PROVIDE THAT THE UNIT THAT IS CO NTEMPLATED FOR GRANT OF BENEFIT OF DEDUCTION IS THE ELIGIBLE UNDERTAKING AND THAT IS ALSO HOW THE CONTEMPORANEOUS CIRCULAR OF THE DEPARTMENT UNDERSTO OD THE SITUATION, IT IS LOGICAL AND NATURAL THAT THE, DEDUCTION OF THE PROF ITS AND GAINS OF THE BUSINESS OF AN ELIGIBLE UNDERTAKING HAS TO BE MADE INDEPENDENT LY AND, THEREFORE, IMMEDIATELY AFTER THE STAGE OF DETERMINATION OF ITS PROFITS AND GAINS. AT THAT STAGE THE AGGREGATE OF THE INCOMES UNDER OTHER HEAD S AND THE PROVISIONS FOR SET OFF AND CARRY FORWARD CONTAINED IN SECTIONS 70, 72 AND 74 OF THE ACT WOULD BE PREMATURE FOR APPLICATION. THE DEDUCTION UNDER SECT ION 10A THEREFORE WOULD BE PRIOR TO THE COMMENCEMENT OF THE EXERCISE TO BE UNDE RTAKEN UNDER CHAPTER VI OF THE ACT FOR ARRIVING AT THE TOTAL INCOME OF THE ASSESSEE FROM THE GROSS TOTAL INCOME. THE SOMEWHAT DISCORDANT USE OF THE EXPRESSI ON 'TOTAL, INCOME OF THE ASSESSEE' IN SECTION 10A CAN BE RECONCILED BY UNDERS TANDING THE EXPRESSION ITA NO. 5861/DEL/2016 7 TOTAL INCOME OF THE ASSESSEE' IN SECTION 10A AS 'T OTAL INCOME OF THE UNDERTAKING'. THEREFORE, THOUGH SECTION 10A, AS AMENDED, IS A PRO VISION FOR DEDUCTION, THE STAGE OF DEDUCTION WOULD BE WHILE COMPUTING THE GROSS TOTAL INCOME OF THE ELIGIBLE UNDERTAKING UNDER CHAPTER IV OF THE ACT AND NOT AT THE STAGE OF COMPUTATION OF THE TOTAL INCOME UNDER CHAPTER VI. DECISION OF THE KARNATAKA HIGH COURT IN CIT VS. YOK OGAWA INDIA LTD. [2012] 341 ITR 385 (KARN) AFFIRMED ON THIS POINT. 16. SO, FOLLOWING THE LAW LAID DOWN BY HONBLE SUP REME COURT IN CIT VS. YOGOKAWA INDIA LTD. (SUPRA), DEDUCTION U/S 10A IS R EQUIRED TO BE TAKEN BEFORE SETTING OFF BROUGHT FORWARD LOSSES AND UNABSORBED D EPRECIATION. ACCORDINGLY, GROUNDS NO.5, 5.1 & 5.2 ARE DETERMINED IN FAVOUR OF THE ASSESSEE AND THE AO IS DIRECTED TO COMPUTE THE DEDUCTION U/S 10A ACCORDING LY. RESPECTFULLY FOLLOWING THE ABOVE DECISION, WE DISMI SS THE APPEAL OF THE REVENUE ON THIS SCORE. 8. IN RESPECT OF DISALLOWANCE U/S. 14A, WE FIND THA T THE LD. CIT(A) HAS DONE A GOOD REASONED ORDER OBSERVING AS UNDER : 5.3 THE REASON GIVEN BY AO AND THE SUBMISSION OF TH E APPELLANT ARE CONSIDERED. SINCE, THE APPELLANT HAD INCOME WHICH I S NOT INCLUDED IN TAXABLE INCOME, APPLYING THE REAL INCOME THEORY A S STIPULATED INCOME THE CASE OF MAXOPP INVESTMENT LTD. & ORS. VS. CIT (2012 ) 247 CTR (DEL) 162, THE APPLICATION OF SECTION OF SECTION 14A IS AS PER LAW. SINCE, THE SECTION 14A IS APPLICABLE, THE AO HAD NO OPTION BUT TO COMP UTE THE DISALLOWABLE AMOUNT UNDER RULE 8D. IN THE LIMB I OF RULE 8D TH E DIRECT INTEREST EXPENSE FOR THE CAPITAL BORROWED AND INVESTED, INCOME FROM WHICH IS EXEMPTED, IS DISALLOWED. IN APPELLANTS CASE SUCH EXPENDITURE IS NOT AVAILABLE. UNDER LIMB II OF THE RULE, THE INDIRECT EXPENDITURE IS DISALLOWED ON A PROPORTIONATE BASIS. SINCE, THE APPELLANT HAS BEEN ABLE TO ESTABLISH THAT NONE OF THE FUND BORROWED IS DIVERTED TOWARDS INVES TMENT IN MUTUAL FUND ITA NO. 5861/DEL/2016 8 UNITS, THE EXPENDITURE RELATED TO INDIRECT EXPENSES IS NOT JUSTIFIABLE AND HENCE THE ADDITION OF RS.3,12,793/- U/S 14A IS DELE TED. HOWEVER, REGARDING DISALLOWANCE OF RS.1,38,640/- UNDER LIMB III OF RUL E 8D, THE APPELLANT HAS NOT BEEN ABLE TO EXPLAIN WHY SOME EXPENDITURE RELAT ED TO MANAGEMENT OF SUCH INVESTMENT, INCOME FROM WHICH IS EXEMPTED, SHO ULD NOT BE DISALLOWED. SINCE THE INVESTMENT HAS BEEN MADE, SOM E AMOUNT OF FOLLOW UP ACTIONS, RECORD KEEPINGS, DISCUSSIONS AND CONSUL TATIONS ARE BOUND TO HAPPEN WHICH WILL LEAD TO SOME ADMINISTRATIVE EXPEN SES. SUCH ADMINISTRATIVE EXPENSES ARE TO BE COMPUTED AT THE R ATE OF 5% OF AVERAGE INVESTMENT. IN THE CASE OF APPELLANT, THE AO HAS CO MPUTED SUCH AMOUNT AT RS. 1,38,640/- WHICH IS IN ACCORDANCE WITH THE LAW AND HENCE CONFIRMED. ACCORDINGLY, GROUND OF APPEAL IS PARTLY ALLOWED. THERE BEING NO CONTRARY MATERIAL ON RECORD FROM TH E SIDE OF REVENUE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE FI NDINGS REACHED BY THE LD. CIT(A). ACCORDINGLY, THE APPEAL OF THE REVENUE DESE RVES TO BE DISMISSED. 9. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.01.2019. SD/- SD/- (AMIT SHUKLA) (L.P. S AHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 15.01.2019 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI