D.C.I.T. Central cricle, RAIPUR V. MAHAMAYA STEEL INDUSTRIES LTD, RAIPUR

ITA 62/RPR/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3316 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 10-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MISHRA
• Keywords: Rejection of books of accounts; Depreciation; Earning of tax free income; Corroborative evidences; Onus to prove; Rule 8D
• Section: 143(3); 153A; 14A; 250; 201; 13; 145(3); 145; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI N. K. CHOUDHRY, JUDICIAL MEMBER ./ I.T.A. NO. 62/RPR/2018) ( ASSESSMENT YEAR : 2013-14) ASSTT. COMMISSIONER OF INCOME TAX (CENTRAL)-2 CENTRAL REVENUE BUILDING, CIVIL LINES, RAIPUR (C.G.) - 492001 / VS. MAHAMAYA STEEL INDUSTRIES LTD. B-8 & 9, SECTOR-C, URLA INDUSTRIAL AREA, SARONA, RAIPUR (C.G.) ./ ./PAN/GIR NO. : AABCR0695Q ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI P. K. MISHRA, CIT.DR / RESPONDENT BY : SHRI VEEKAAS S SHARMA, A.R. DATE OF HEARING 02/08/2021 / DATE OF PRONOUNCEMENT 21/10/2021 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF IN COME TAX(APPEALS)-II, RAIPUR (CIT(A) IN SHORT), DATED 02.02.2018 ARISING IN THE ASSESSMENT ORDER DATED 30.03.2016 PA SSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3) OF THE INCOM E TAX ACT, 1961 (THE ACT) CONCERNING AY 2013-14 2. THE GROUNDS OF APPEAL RAISED BY REVENUE READ HER EUNDER: ITA NO. 62/RPR/2018 (ACIT VS. MAHAMAYA STEEL INDUSTRIES LTD.) A.Y. 2013-14 - 2 - 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) ERRED IN NOT APPRECIATING THAT THERE EXISTED INCRIM INATING SEIZED MATERIAL WHICH SHOWED THAT THE ASSESSEE COMPANY HAS INDULGED IN UNACCOUNTED PRODUCTION BY SUPPRESSING ITS YIELD, PARTICULARLY IN STEEL MELTING SHOP(SMS). ' 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(APPEAL) ERRED IN NOT APPRECIATING THAT THE BOOK S OF ACCOUNTS ARE NOT RELIABLE IN VIEW OF THE EVIDENCE SEIZED DUR ING THE COURSE OF SEARCH REFLECTING SUPPRESSION OF PRODUCTION YIEL D. THEREFORE WHEN THERE IS NO CHANGE IN THE BUSINESS AND THE MOD US OPERANDI THE CIT(A) OUGHT TO HAVE ACCEPTED 89% AS THE YIELD ALSO. 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(APPEAL) ERRED IN DELETING THE DISALLOWANCE MADE BY THE AO U/S.14A OF RS.11,61,305/- PARTICULARLY WHEN THE ASS ESSEE DID NOT DISCHARGE THE ONUS TO PROVE THAT THE INTEREST EXPEN DITURE CLAIMED WAS OUT OF OWN INTEREST BEARING FUNDS OR NON-INTERE ST BEARING FUND, EVEN IF IT HAS SUFFICIENT CASH PROFIT.' 3. GROUND NOS. 1 & 2 CONCERN ADDITION ON ACCOUNT OF LOWER YIELD OF PRODUCTION COMPARED TO INDUSTRIAL AVERAGE. 4. BRIEFLY STATED, THE ASSESSEE IS ENGAGED IN THE M ANUFACTURING OF RE-ROLLED PRODUCTS SUCH AS HEAVY STEEL STRUCTURES, JOIST, INGOTS, GIRDERS ETC. IT HAS TWO DIVISIONS NAMELY FURNACE D IVISION WHICH IS ALSO KNOWN AS STEEL MELTING SHOP (SMS) AND ROLLING MILL DIVISION (RMD). FURNACE/SMS DIVISION USES SPONGE IRON, PIG IRON, SCRAP AND END CUTTING (END CUTTING IS BASICALLY OUTPUT OF RMD ) AS RAW MATERIAL TO MANUFACTURE BILLETS AND BLOOMS AND THE RMD DIVIS IONS USES THESE BILLETS AND BLOOMS AS RAW MATERIAL TO PRODUCE FURTHER RE-ROLLED PRODUCTS SUCH AS HEAVY STEEL STRUCTURAL ETC. 4.1 A SEARCH OPERATION WAS CARRIED OUT IN THE CASE OF ASSESSEE ON 17.10.2011 AT THE MAIN OFFICE AND THE FACTORY PREMI SES OF THE ASSESSEE COMPANY. CONSEQUENTLY, THE ASSESSMENT OF A.Y. 2012-13 AND PRECEDING SIX YEARS WERE SUBJECTED TO SEARCH AS SESSMENT PROCEEDINGS. IN THE SEARCH ASSESSMENT, THE AO REJE CTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND ALLEGED THAT THE ASSES SEE COMPANY HAS SUPPRESSED ITS YIELD OF SMS/FURNACE DIVISION. THE AO ASSUMED THE ITA NO. 62/RPR/2018 (ACIT VS. MAHAMAYA STEEL INDUSTRIES LTD.) A.Y. 2013-14 - 3 - AVERAGE YIELD OF THE INDUSTRY AT 89% IN THE SMS/ FU RNACE DIVISION AND CONSEQUENTLY, THE DIFFERENCE BETWEEN ACTUAL YIE LD SHOWN BY THE ASSESSEE VIS--VIS STANDARD YIELD OF 89% ASSUMED BY THE AO WAS TREATED AS UNACCOUNTED PRODUCTION/UNRECORDED SALES IN THOSE YEARS. IN THE FIRST APPEAL AGAINST THE SEARCH ASSESSMENT, THE ADDITIONS ON ACCOUNT OF ALLEGED LOWER YIELD OF PRODUCTION DECLAR ED WAS DELETED AND REVERSED. THE REVENUE PREFERRED APPEAL AGAINST THE AFORESAID FIRST APPELLATE ORDER. HOWEVER, THE CO-ORDINATE BE NCH OF TRIBUNAL ALSO DID NOT SEE ANY MERIT IN SUCH ADDITIONS TOWARD S LOWER YIELD MADE BY AO IN ITA NOS. 232 TO 235/RPR/2014 ORDER DATED 07.11.2019 CONCERNING AYS. 2009-10 TO 2012-13. 4.2 THE PRESENT APPEAL IN QUESTION RELATES TO A.Y. 2013-14 WHICH IS SUBSEQUENT TO THE YEAR COVERED IN THE SEARCH ASS ESSMENT PROCEEDINGS. IT IS NOTICED THAT THE ADDITIONS HAVE BEEN MADE BY THE AO IN THE INSTANT CASE IN THE SAME MANNER BY COMPAR ING YIELD DECLARED BY THE ASSESSEE IN SMS/ FURNACE DIVISION W ITH THE AVERAGE INDUSTRY YIELD OF 89% ASSUMED BY THE AO AND FOR THI S PURPOSE THE AO HAS REFERRED TO THE CONCLUSION DRAWN BY HIS PRED ECESSOR AO IN SEARCH ASSESSMENT COMPLETED IN RELEVANT TO A.Y. 200 6-07 TO 2012-13 WHEREIN ALSO THE SIMILAR ADDITIONS WERE MADE ON ACC OUNT OF ALLEGED SUPPRESSION OF YIELD. THE AO HAS SIMPLY CONTINUED WITH THE ADDITIONS TOWARDS LOWER YIELD AS SHOWN IN THE SEARC H ASSESSMENT ON THE GROUND THAT THE DELETION OF ADDITION IN FIRST A PPELLATE ORDER IN THOSE YEARS HAVE NOT BEEN AGREED BY THE DEPARTMENT AND AN APPEAL HAS BEEN PREFERRED AGAINST THE FIRST APPELLATE ORDE R BEFORE THE ITAT WHICH IS PENDING FOR ADJUDICATION. 5. AGGRIEVED BY THE ADDITIONS MADE TOWARDS LOWER YI ELD, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). THE C IT(A), AFTER TAKING NOTE OF ATTENDANT FACTS AND CIRCUMSTANCES, D ELETED THE ITA NO. 62/RPR/2018 (ACIT VS. MAHAMAYA STEEL INDUSTRIES LTD.) A.Y. 2013-14 - 4 - ADDITIONS SO MADE FOR WHICH THE CONCLUDING OPERATIV E PARA IS REPRODUCED FOR READY REFERENCE: I HAVE CONSIDERED THE GROUNDS OF APPEAL, GONE THRO UGH THE ORDER OF THE AO AND SEEN THE SUBMISSIONS OF THE APP ELLANT AS WELL AS THE REMAND REPORT OF THE AO AND COMMENTS OF THE APPELLA NT ON THE REMAND REPORT. I OBSERVE THAT THE AO HAS REJECTED THE BOOK S OF ACCOUNTS OF THE APPELLANT U/S 145 OF THE ACT AND DOING SO THE AO HA S MENTIONED THAT THE GP RATE OF THE APPELLANT HAS GONE DOWN DRASTICALLY AS COMPARED TO THE PRECEDING YEARS AND THE APPELLANT HAS NOT SATISFACT ORILY EXPLAINED THE REASONS FOR DECLINE IN THE GP AND NP RATES. THE AO FURTHER STATED THAT THE YIELD DECLARED BY THE APPELLANT IN STEEL MELTIN G SHOP I.E. SMS DIVISION IS NEARLY 85% WHICH IS MUCH BELOW THE AVER AGE YIELD IN THE LAST 7 ASSESSMENT YEAR TAKEN BY 85% WHICH IS MUCH B ELOW THE AVERAGE YIELD IN THE LAST 7 ASSESSMENT YEARS TAKEN BY THE E RSTWHILE AO AND THEREAFTER THE AO CALCULATED THE AMOUNT OF SUPPRESS ION IN PRODUCTION AND SALES BY TAKING THE YIELD OF 89% AND WORKED OUT THE AMOUNT OF SUPPRESSION IN SALES AND AN INCOME AND MADE ADDITIO N OF RS.19,09,67,165/-. THE AO FURTHER STATED THAT THE B ASIS FOR ADOPTING YIELD OF 89% HAS BEEN DISCUSSED AT LENGTH IN THE AS SESSMENT ORDER FOR THE AYS 2006-07 TO 2012-13 AND THAT APPEAL HAS BEEN PREFERRED BEFORE THE ITAT AGAINST THE ORDER PASSED BY MY LD. PREDECE SSOR IN THE APPELLANTS OWN CASE. 10 VIDE THIS OFFICE LETTER DATED 07.12.2017 IN F.NO .CIT(A)- II/RPR/APPEAL PROCEED/2017-18 DATED 07.12.2007 AND THE AO WAS ASKED TO EXPLAIN THE BASIS BEHIND ADOPTION OF YIELD AT 89%. VIDE HER LETTER DATED 21.12.2017 THE AO ENCLOSED THE ASSESSM ENT ORDER OF THE APPELLANT FOR THE AY 2006-07 TO 2012-13 AND RELIED UPON THE FINDINGS AND CONCLUSIONS BY HER PREDECESSOR IN THE SEARCH AS SESSMENT PROCEEDINGS COMPLETED IN THE CASE OF THE APPELLANT. I ALSO OBSERVE THAT THE ADDITION MADE IN THE ASSESSMENT BY ADOPTING 89% YIELD IN THE SMS DIVISION STANDS DELETED BY MY LD. PREDECESSOR IN HI S ORDER. AS REGARDS DECLINE IN GP RATE THE APPELLANT CONTENDED THAT THE IRON AND STEEL SECTOR HAD BEEN GOING THROUGH A CHALLENGING PHASE O WING TO SLUGGISH DOMESTIC DEMAND AND CONSTRAINTS OF IRON ORE SUPPLY ALONG WITH RISE IN STEEP RISING IRON OR PRICES. IT WILL BROUGHT TO MY NOTICE THAT THE COST POWER IN SMS DIVISION HAS INCREASED BY NEARLY 56% I N COMPARISON TO THE FY 2009-10 AND IN THE CASE OF ROLLING MILL DIVI SION IT HAS INCREASED BY NEARLY 52%. MY ATTENTION WAS ALSO INVI TED TO THE INCREASE IN COST OF RAW MATERIAL AND INPUTS IN THE ROLLING M ILL DIVISION SUCH AS BLOOMS AND BILLETS AS WELL AS THE INCREASE IN THE C OST OF INPUTS OF SMS DIVISION. I OBSERVE THAT THE AO HAS MADE THE ADDITION BY ESTI MATING THE YIELD AT 89% OF THE TOTAL RAW MATERIAL CONSUMED IN THE SMS D IVISION AFTER REJECTING THE BOOKS OF ACCOUNTS OF THE APPELLANT. T HE ONLY REASON FOR REJECTION OF BOOKS OF ACCOUNTS ADDUCED BY THE AO IS THAT THE APPELLANT HAD DECLARED YIELD IN THE SMS DIVISION LESS THAN 89 %. IN THE OPINION OF THE AO AS CAN BE SEEN, THE YIELD OF THE APPELLANT C OMPANY SHOULD HAVE BEEN SAME IN ALL THE YEARS AS THE NATURE OF THE BUS INESS IS THE SAME AS IT WAS DURING THE PERIOD COVERED UNDER THE SEARCH P ROCEEDINGS. IN THE ASSESSMENT ORDER THE AO HAS NOT BROUGHT ON RECORD A NY IRREGULARITY ON DEFECT IN THE BOOKS OF ACCOUNTS BILLS AND VOUCHERS AND OTHER ITA NO. 62/RPR/2018 (ACIT VS. MAHAMAYA STEEL INDUSTRIES LTD.) A.Y. 2013-14 - 5 - DOCUMENTARY EVIDENCES PERTAINING TO YEAR UNDER CONS IDERATION. WHAT CAN BE NOTICED FROM THE ASSESSMENT ORDER IS THAT TH E AO HAS BASED HIS ASSESSMENT ON THE OUTCOME OF THE ASSESSMENT PROCEED INGS FOR THE SEARCH PERIOD COVERED DURING ACTION U/S 132 OF THE ACT AND EXTENDED THE SAME TO THE IMPUGNED ASSESSMENT YEAR I.E. 2013-14 WHICH IS MY OPINION HAD NO BEARING FOR THE ASSESSMENT PROCEEDINGS FOR THE I MPROVED AY. THERE IS NO MERIT IN THE CONTENTION OF THE AO THAT THE CONCLUSIONS DRAWN IN THE SEARCH ASSESSMENT PROCEEDINGS ARE ENHA NCEMENT MADE, WHICH IN FACT WERE DELETED, CAN BE MADE BASIS FOR ASSESSING THE INCOME OF OTHER SUBSEQUENT YEARS WITHOUT CONSIDERING IN FA CTS AND CIRCUMSTANCES OF EARLIER YEARS ARE THE YEAR IN QUES TION. EACH YEAR ASSESSMENT IS A SEPARATE ASSESSMENT WHICH ATTAINS F INALITY FOR THE AREA UNLESS DISTURBED BY COGENT FACTS AND MATERIALS AND DOES NOT GOVERN LATER YEARS. THE FACTS AND CIRCUMSTANCES OF EACH YE AR ARE TO BE CONSIDERED SEPARATELY AND MUST FIND REFERENCE IN TH E ASSESSMENTS COMPLETED. 11. I FURTHER OBSERVE THAT THE BOOKS OF ACCOUNTS OF THE APPELLANT WAS SUBJECT TO TAX AUDIT AND SINCE THE APPELLANT IS DEA LING EXCISABLE PRODUCTS IT HAS FILED EXCISE RETURNS ON MONTHLY BAS IS AS WELL AS THE VAT RETURNS AS PER SALES TAX LAWS. THE EVIDENCE OF WHIC H WERE PRODUCED BEFORE THE AO WHO EXAMINED THE SAME INCLUDING THE B ILLS AND VOUCHERS. WITH A VIEW TO BRING ON RECORD THE BASIS BEHIND ADO PTION OF YIELD AT 89% THE AO WAS ASKED TO CONVEY THE BASES FOR DOING SO. FROM THE REMAND REPORT OF THE AO I FIND THAT RELIANCE HAS BE EN PLACED BY HER ON THE ASSESSMENT ORDER PASSED U/S 153A R.W.S. 143(3) FOR THE SEARCH PERIOD I.E. AY 2006-07 TO 2012-13. IMPORTANTLY EVEN IN THE ASSESSMENT ORDER PERTAINING TO SEARCH PERIOD THERE IS NO REFER ENCE OF ANY SEIZED MATERIAL OR ANY OTHER DOCUMENTARY EVIDENCES TO ESTA BLISH THE FACT THAT THE APPELLANT HAD INDULGED IN UNACCOUNTED PRODUCTIO N AND UNACCOUNTED SALES. THE ADDITIONS WERE MADE MAINLY ON THE PRETEX T THAT THE AVERAGE YIELD IN THE INDUSTRY IS IT NEARLY 89% AND THE YIEL D DECLARED BY THE APPELLANT IS LOW AS COMPARED TO THE YIELD SHOWN BY OTHER MANUFACTURERS OF CHHATTISGARH. THERE COULD BE SEVERAL REASONS FOR VARIATION OF GP AND NP BUT THE VARIATION PER SE IS NOT SUFFICIENT T O DRAW AN INFERENCE THAT THE BOOKS OF ACCOUNTS ARE LIABLE TO BE REJECTE D U/S 145 UNTIL AND UNLESS SPECIFIC DEFECT OR IRREGULARITY ARE POINTED OUT AND BROUGHT ON RECORD PERTAINING TO THE BOOKS OF ACCOUNTS OF THE A PPELLANT. 12. I HAVE SEEN THE APPELLATE ORDER IN A.NO.718 TO 722 FOR AY 2008- 09 TO 2012-13 FOR MY LD. PREDECESSOR WHO HAS ADJUDI CATED THE SEARCH ASSESSMENT OF THE APPELLANT FOR ALL THE YEARS AND D ELETED THE ADDITIONS MADE. IT IS FRUITFUL TO REPRODUCE HIS OBSERVATION A S UNDER: IT IS SEEN THAT A.O HAS NOT POINTED OUT ANY SUPPRES SION OF PRODUCTION BASED ON ANY COGENT AND INCRIMINATING MA TERIAL AGAINST THE APPELLANT. MATERIAL SHOWING FINANCIAL N EXUS CAN ONLY BE A VALID BASIS FOR HOLDING SUSPICION OR MAKING TH E ADDITION. UNFORTUNATELY, NOT A SINGLE DOCUMENT SHOWING ANY FI NANCIAL DEALINGS BY THE APPELLANT HAS BEEN REFERRED TO EITH ER IN THE ASSESSMENT ORDER, OR EVEN DURING THE COURSE OF HEAR ING, DESPITE THE LIBERTY GRANTED VIDE THIS OFFICE LETTERS ON 28. 04.2014 AND 16.05.20214. THE FACTS AND CIRCUMSTANCES OF THE PRE SENT CASE REVEAL THAT THE A.O JUST BRUSHED ASIDE THE OBJECTIO NS/SUBMISSIONS ITA NO. 62/RPR/2018 (ACIT VS. MAHAMAYA STEEL INDUSTRIES LTD.) A.Y. 2013-14 - 6 - AND CONTENTIONS RAISED BY THE APPELLANT AND EVIDENC ES PLACED ON RECORD. THE A.O HAS MADE MECHANICAL ADDITION OF THE DIFFERENCE BETWEEN THE UNACCOUNTED PRODUCTION/SALES WORKED OUT ON THE BASIS OF 89% YIELD SUSPECTED BY THE A.O THAT MUST H AVE BEEN ACHIEVED BY THE APPELLANT. THE A.O. HAS NOT BROUGHT ANY MATERIAL ON RECORD TO DISBELIEVE THE BOOK RESULT SHOWN BY TH E APPELLANT. IF THERE IS NO SUPPRESSION OF MATERIAL FACTS, THE AUTH ORITY CANNOT EMBARK UPON A SPECULATIVE ASSESSMENT OF NATIONAL PR OFITS. THE ASSESSMENT SHOULD BE BASED ON COGENT FACTS AND THER E SHOULD BE NO VINDICTIVENESS OR ARBITRARINESS IN PASSING THE A SSESSMENT ORDER. THE ESTIMATED ADDITION MADE BY THE A.O DO NO T BEAR ANY RELATIONSHIP WITH THE SPECIFIC DEFECT IN BOOKS OF A CCOUNTS AND THE A.O CANNOT BE PERMITTED TO MAKE ARBITRARY ADDITION. THE CARE THING TO BE SEEN IS THE EVIDENCE FOUND WHICH WILL B E THE BASIS FOR MAKING THE ASSESSMENT. COMING TO THE FACTS OF THE C ASE, THE AO ESTIMATED THE UNACCOUNTED PRODUCTION AND SALES ON B ENCHMARK YIELD OF 89% IN CASE OF SMS DIVISION. THE ENTIRE ES TIMATED SUPPRESSED SALES HAS BEEN TREATED AS PROFIT. I AM C ONVINCED THAT THE DETERMINATION OF UNDISCLOSED INCOME IN THIS CAS E IS MERELY ON THE BASIS OF PRESUMPTION AND AN ON ESTIMATE BASIS. SEARCH ASSESSMENT HAS TO BE FRAMED ON THE BASIS OF SOME MA TERIAL, WHICH IN THIS CASE IS RAW MATERIAL CONSUMED IN SMS DIVISI ON FOR MANUFACTURING OF BLOOMS AND BILLETS IN FURNACE. NO OTHER MATERIALS OR ASSET DETAILS WERE FOUND DURING THE CO URSE OF SEARCH. ON THE CONTRARY, THE APPELLANT HAD PROVIDED ALL THE REQUISITE DETAILS REGARDING ITS PRODUCTION ACTIVITY . THE ITEMS OF RAW MATERIAL PURCHASED ARE EXCISABLE PRODUCTS, THE QUANTITY OF RAW MATERIAL PURCHASED AS MENTION IN EXCISABLE AND COMMERCIAL INVOICE WAS TEST CHECKED WITH THE ENTRIES IN THE EX CISE RECORD FOR ROW MATERIAL I.E. RG-1 AND THE SAME WAS FOUND T O BE IN ORDER. THE QUANTITY APPEARING IN THE EXCISE REGISTE RS WAS CROSS CHECKED WITH THE ENTRIES IN THE EXCISE RETURNS AND THE SAME WAS FOUND TO BE IN ORDER AND TALLYING WITH THE EXCISE R ECORDS. THE INVENTORY APPEARING IN THE EXCISE RECORDS AND EXCIS E RETURNS WAS FOUND TO BE THE SAME AS IN FINANCIAL RECORDS I. E. THE BOOKS OF ACCOUNTS AND AUDITED FINANCIAL STATEMENTS. UNDISPUT EDLY, THE PRODUCTION WAS METICULOUSLY ROUTED THROUGH THE APPE LLANTS DAILY PRODUCTION REGISTER/ EXCISE RECORDS. THE ENTRIES TH EREIN WERE DEFINITELY CO-RELATABLE TO THE ENTRIES IN THE STOCK REGISTER, ENABLING ON EASY STOCK TALLY, IF ONE WAS SO REQUIRE D. HOWEVER, THE AO DID NOT DEEM IT FIT TO CARRY OUT THE EXERCIS E OF TALLYING THE STOCK AS PER THESE ENTRIES IN THE TWO TYPES OF BOOK S. HE MERELY WENT BY THE ALLEGED SUPPRESSED YIELD. VARIOUS SUBMI SSIONS REGARDING REASONS FOR VARIATION IN CONSUMPTION OF P OWER, FURNACE OIL, YIELD ETC WERE DULY FURNISHED BY THE A PPELLANT. THE APPELLANT DID FURNISH THE COMPARABLE INSTANCES AND ALSO DEMONSTRATED WITH TECHNICAL DETAILS OF PRODUCTION. THESE COPIOUS EVIDENCES WERE WRONGLY IGNORED BY THE AO. COMMISSIO NER OF INCOME TAX VS. HINDUSTAN TIN WORK LTD. (2007) 291 I TR 290 (DEL) : (2007) 164 TAXMAN 529. 13. FROM THE ABOVE OBSERVATIONS OF MY LD. PREDECESS OR WAS ADJUDICATED THE SEARCH ASSESSMENTS FOR THE RELEVANT ASSESSMENT YEARS CONVERTED IN ACTION U/S 132 THERE WAS NO SEIZED MAT ERIAL LEADING TO THE CONCLUSION THAT THE APPELLANT HAS SUPPRESSED THE YI ELD AND HENCE ITA NO. 62/RPR/2018 (ACIT VS. MAHAMAYA STEEL INDUSTRIES LTD.) A.Y. 2013-14 - 7 - ADOPTION OF 89% YIELD IS JUSTIFIED. WHEN THERE IS N O MATERIAL FOR ADOPTING 89% EVEN DURING THE SEARCH ASSESSMENTS THE RE IS NO BASIS FOR RELYING ON THE ASSESSMENTS IN ADAPTING 89% YIELD FO R THE AY 2013-14. I ALSO OBSERVED THAT IN THE APPELLATE ORDER MY LD PRE DECESSOR HAS TABULATED COMPARABLE INSTANCES OF GP AND NP OF INDU STRY AVERAGE WHEREIN THE GP AND NP OF THE APPELLANT IS MUCH HIGH ER THAN THE OTHERS. THE CASE LAWS RELATED UPON IN THE APPELLATE ORDER O F MY PREDECESSOR SOME OF WHICH ARE REPRODUCED AS UNDER ARE RELEVANT TO THE FACTS IN QUESTION. (A) ACIT VS. M/S BALAJEE STRUCTURALS (I) PVT. LTD. (SUPRA), THE JURISDICTIONAL BENCH HONBLE ITAT; (B) ACIT VS M/S SUPER IRON & STEEL PVT. LTD., ITA N O.139 TO 141/BLPR2010; (C) LALCHAND BHAGAT AMBICA RAM VS. CIT: (1959) 37 I TR 288; (D) INCOME TAX OFFICER VS. W.D. ESTAE P. LTD. (1993 ) 46 TTJ (BOM) 143 : 45 ITD 473; (E) COMMISSIONER OF INCOME TAX VS. DISCOVERY ESTATE S PVT. LTD. (2013) 356 ITR 159 (DELHI); (F) MANGILAL RAMESHWARLAL SONI (HUF) VS. ASSISTANT COMMISSIONER OF INCOME TAX (2004) 83 TTJ (JD) 770 : (2004) 4 SOT 680 (JD); (G) BANSAL STRIPS (P) LTD & ORS. VS. ASSISTANT COMM ISSIONER OF INCOME TAX (2006) 100 TTJ (DEL) 665 : (2006) 99 ITD (DEL) BY THE HONBLE ITAT, DELHI A BENCH; (H) DHAKESWARI COTTON MILLS LTD. VS. COMMISSIONER O F INCOME TAX (1954) 26 ITR 775 (SC); 14. IN TOTALITY OF THE FACTS DISCUSSED ABOVE I FIND NO BASIS FOR ADOPTING 89% YIELD AND HENCE THE ADDITION OF RS.19, 09,67,165/- IS DELETED AND GROUNDS NO. 2 & 3 ARE ALLOWED. 6. AGGRIEVED BY THE RELIEF GRANTED BY THE CIT(A), T HE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 7. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED DR FOR THE REVENUE RELIED UPON THE OBSERVATIONS MADE BY TH E AO IN THE ASSESSMENT ORDER. 8. PER CONTRA, LEARNED COUNSEL FOR THE ASSESSEE PLA CED RELIANCE UPON THE FINDINGS IN THE ORDER OF THE CIT(A). THE LEARNED COUNSEL FURTHER SUBMITTED THAT ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE CO-ORDINATE BENCH OF T RIBUNAL IN THE CASE OF THE ASSESSEE FOR A.Y. 2009-10 TO 2012-13 IN ITA NOS. 232 TO 235/RPR/2014 ORDER DATED 07.11.2019 . THE LEARNED COUNSEL ITA NO. 62/RPR/2018 (ACIT VS. MAHAMAYA STEEL INDUSTRIES LTD.) A.Y. 2013-14 - 8 - SUBMITTED THAT THE ISSUE BEING ONLY A CONTINUATION OF THE OLD CONTROVERSY WITHOUT ANY FACTUAL DEVIATION, THE CONC LUSION ALREADY ARRIVED AT BY THE CO-ORDINATE BENCH ON THE SUBJECT IN ISSUE REQUIRES TO BE FOLLOWED. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS MATERIAL PLACED BEFORE US BY WAY OF PAPER BOOK REFERRED TO A ND RELIED UPON AT THE TIME OF HEARING. WE OBSERVE THAT THE BASIS OF ADDITIONS TOWARDS LOWER YIELD OF PRODUCTION BY THE ASSESSEE IN ITS SM S/FURNACE DIVISION IS ON ACCOUNT OF COMPARISON WITH AVERAGE I NDUSTRY YIELD OF 89% ASSUMED BY THE AO. SIGNIFICANTLY, IN THIS REGA RD, WE OBSERVE THAT THE CIT(A), ON OBJECTION RAISED BY THE ASSESSE E TO SUCH PRESUMED YIELD, WROTE LETTER DATED 07.12.2017 TO TH E AO FOR THE PURPOSES OF UNDERSTANDING THE BASIS BEHIND ADOPTION OF YIELD AT 89%. THE AO, HOWEVER, VIDE LETTER DATED 22.12.2017 MERELY ENCLOSED THE ASSESSMENT ORDER FOR AY 2006-07 TO 201 2-13 FOR THE PURPOSES OF ADOPTING SUCH STANDARD YIELD. IT IS EV IDENT THAT THE AO IN THE INSTANT CASE HAS MERELY PROCEEDED ON THE FIN DINGS ARRIVED AT BY THE AO IN A.Y. 2006-07 TO 2012-13. AT THIS STAG E, IT WOULD BE PERTINENT TO TAKE NOTE OF DECISION OF THE CO-ORDINA TE BENCH CONCERNING A.YS. 2009-10 TO 2012-13 ON THE SAME VER Y ISSUE IN THE CASE OF THE ASSESSEE IN ITA NOS. 232 TO 235/RPR/2014 ORDER DATED 07.11.2019 . THE CO-ORDINATE BENCH AFTER TAKING NOTE OF THE R ELEVANT FACTS EMERGING ON RECORD, FOUND SUBSTANTIAL MERIT I N THE DECISION RENDERED BY THE CIT(A) IN THOSE YEARS AND THUS ENDO RSED THE ACTION OF THE CIT(A) IN DELETING SUCH ADDITIONS ON ACCOUNT OF LOWER YIELD. THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE ITA T IS REPRODUCED HERE FOR READY REFERENCE: 8. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS. WE HAVE ALSO ANALYZED THE JUDICIAL PRONOUNCEMENTS P LACED BEFORE US. THE FACTS ON RECORDS CLEARLY DEMONSTRATES THAT THE ASSESSING OFFICER ITA NO. 62/RPR/2018 (ACIT VS. MAHAMAYA STEEL INDUSTRIES LTD.) A.Y. 2013-14 - 9 - HAS FAILED TO BRING ANY COGENT REASONS/EVIDENCES FO R MAKING ADDITION IN THE CASE OF THE ASSESSEE. HE HAS ARRIVED AT VARIOUS MATHEMATICAL CALCULATIONS AND HAS DERIVED THE YIELD AT 89%. ALL THESE WERE DONE BY THE ASSESSING OFFICER WITHOUT BRINGING ON RECORD AN Y SINGLE DOCUMENT WHICH INDICATES THAT THE ASSESSEE HAS SUPPRESSED IT S YIELD OR HAS INDULGED IN ANY UNACCOUNTED SALES. IT IS ALSO ON RE CORD THAT THOUGH THE ASSESSING OFFICER HAS ESTIMATED PRODUCTION AT 89% I N SMS DIVISION AND HAD MADE VARIOUS MATHEMATICAL CALCULATIONS AT PAGES 7 TO 11 OF THE ASSESSMENT ORDER REGARDING ROLLING MILL DIVISION, H OWEVER, IT IS SEEN FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICE R HAS NOT DRAWN ANY ADVERSE INFERENCE AS REGARDS ROLLING MILL DIVISION AND NOR DID THE ASSESSING OFFICER FIND YIELD OF ROLLING MILL DIVISI ON TO BE LOWER. THE ASSESSING OFFICER HAS NOT SUBSTANTIATED THE RELEVAN CE AND SIGNIFICANCE OF THESE MATHEMATICAL CALCULATIONS PERTAINING TO RO LLING MILL DIVISION. 8.1 WE FURTHER OBSERVE THAT THE LD. CIT(A) ON HIS O WN CONDUCTED SPECIFIC ENQUIRY IN ORDER TO FIND OUT THE PERCENTAG E OF YIELD DECLARED BY THE OTHER ASSESSEE ENGAGED IN SIMILAR LINE OF BUSIN ESS. IT IS NOTED FROM SUCH COMPARISON THAT THE YIELD DECLARED BY THE DIFF ERENT ASSESSEES IN THE SAME YEAR IS NOT UNIFORM, CONVERSELY EVERY ASSE SSEE DECLARED DIFFERENT YIELD. NOT EVEN A SINGLE COMPARABLE INSTA NCE WAS FOUND DECLARING YIELD OF 89%. THAT FURTHER, ACTION OF THE ASSESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNTS MERELY DUE TO THE R EASON THAT THE YIELD ACHIEVED BY THE ASSESSEE IS LESS THAN THE YIELD PER CENTAGE I.E.89% WHICH HAS NOT BEEN ACHIEVED EVEN BY OTHER ASSESSEES ENGAGED IN SIMILAR LINE OF BUSINESS. THE ASSESSING OFFICER HAS NOT BRO UGHT ON RECORD THE MANNER IN WHICH HE HAS WORKED OUT YIELD OF 89% IN S MS DIVISION. 9. IN THE CASE OF M/S. RAMESH STEEL INDUSTRIES VS. DCIT-1(1), RAIPUR, ITA NO.48 OF 2015, THE HON'BLE CHHATTISGARH HIGH COURT HAS HELD AND OBSERVED THAT 'THE POWER OF THE ASSESSING OFFICER U NDER SECTION 145(3) IS NOT ABSOLUTE BUT WAS REGULATED AND CIRCUMSCRIBED BY STATUTORY PROVISIONS.' THAT FURTHER 'POWER CONSUMPTION IN AN INDUSTRY MAY VARY FOR VARIOUS REASONS. UNDER SECTION 145(3) OF THE IN COME TAX ACT, THE JURISDICTION OF THE ASSESSING OFFICER ARISES IF HE WAS NOT SATISFIED ABOUT THE CORRECTNESS OF THE ACCOUNTS OF THE ASSESSEE. HO WEVER, THE ASSESSING OFFICER SHOULD GIVE SPECIFIC REASONS FOR REJECTING BOOKS OF ACCOUNTS.' 10. IN THE INSTANT CASE, THE ASSESSING OFFICER CALC ULATED YIELD OF 89% AND HAS ALSO CALCULATED CONSUMPTION OF POWER AND DI FFERENCE THERETO PERTAINING TO PRODUCTION AND HAS HELD THAT THE BOOK S OF ACCOUNTS ARE THEREFORE NOT RELIABLE AND REJECTED THE BOOKS OF AC COUNT WHILE RESORTING TO SECTION 145(3) OF THE ACT. AS PER THE LEGAL PRIN CIPLES LAID DOWN BY THE HON'BLE CHHATTISGARH HIGH COURT (SUPRA.) THAT T HIS POWER IS NOT UNFETTERED AND IT HAS TO BE USED JUDICIALLY BY GIVI NG SPECIFIC REASONS WHICH IN THE INSTANT CASE, THE ASSESSING OFFICER HA S NOT COMPLIED WITH. 11. IN THE CASE OF ACIT-1(1), RAIPUR VS. SIYARAM RICE MILL IN ITA NO.59/BLPR/2011 , THE RAIPUR BENCH OF THE TRIBUNAL HAS OBSERVED THA T 'IN A CASE WHERE THE ASSESSING OFFICER HAD APPLIED A MATHEMATICAL FORMULA AND MADE ADDITION BUT HOWEVER, REJECTED ALL THE SUBMISSIONS OF THE ASSESSEE WITHOUT PASSING SPEAKING OR REASONED O RDER'. THE RAIPUR BENCH OF THE TRIBUNAL FURTHER HELD THAT REGARDING M ATHEMATICAL CALCULATION, THE ASSESSING OFFICER HAS NOT REFERRED TO ANY COMPARABLE CASES THAT COULD PROVE THAT THE STAND TAKEN BY HIM WAS BASED ON ITA NO. 62/RPR/2018 (ACIT VS. MAHAMAYA STEEL INDUSTRIES LTD.) A.Y. 2013-14 - 10 - SCIENTIFIC AND LOGICAL BASIS. THAT FURTHER 'A REASO NED ORDER CANNOT BE PASSED WITHOUT CONSIDERING THE REPLY OF THE ASSESSE E FILED BY THE ASSESSEE AND WITHOUT GIVING REASONS AS TO WHY THE R EPLY WAS NOT ACCEPTABLE.' 12. IN THE INSTANT CASE, THE LD. CIT(A) HAD MADE EX ERCISE TO BRING OUT THE PERCENTAGE OF YIELD DECLARED BY THE OTHER ASSES SEE ENGAGED IN SIMILAR LINE OF BUSINESS AND NOWHERE THE YIELD WAS 89%. THE ASSESSING OFFICER ALSO GAVE NO BASIS FOR ITS CALCULATION OF T HE YIELD AT 89%. THERE WAS NO SCIENTIFIC OR LOGICAL BASIS IN THE EXERCISE CONDUCTED BY THE ASSESSING OFFICER. THE SUBMISSIONS MADE BY THE ASSE SSEE, WERE ALSO SUMMARILY REJECTED BY THE ASSESSING OFFICER WHICH I S THEREFORE, NOT IN ACCORDANCE WITH JUDICIAL PRINCIPLE AS HEREIN ABOVE ENSHRINED IN THE VARIOUS JUDICIAL PRONOUNCEMENTS. WE HAVE ALSO OBSER VED IN THE CASE OF ACIT-1(1) RAIPUR VS. RAMESH STEEL INDUSTRIES IN ITA NO.95/BLPR/2011, THE ASSESSING OFFICER MADE ADDITION AS HE NOTED THAT IN THE YEAR UNDER APPEAL, THE ASSESSEE HAD CON SUMED MORE UNITS OF POWER AS COMPARED TO THE LAST TWO ASSESSMENT YEARS. THE TRIBUNAL OBSERVED THAT 'CONSUMPTION OF POWER IN ITSELF IS NO T AN EVIDENCE TO PROVE OR DISPROVE THE PRODUCTION OF FINISHED GOODS. ' WE FURTHER OBSERVE THAT IN THE CASE OF ST. TERESSA'S OIL MILL (761 ITR 365) AND SULABH MARBLES (P.) LTD. (205 CTR 464) DECIDED BY THE HON' BLE KERALA AND RAJASTHAN HIGH COURT HAS HELD THAT 'DISPARITY IN EL ECTRICITY CONSUMPTION CANNOT BE THE CRITERIA FOR REJECTION OF ACCOUNTS AND FOR MAKING AD-HOC ADDITIONS. THE ASSESSEE HAD MAINTAINE D REGULAR BOOKS OF ACCOUNT AND THE ASSESSING OFFICER HAD NOT COME ACRO SS ANY UNACCOUNTED PURCHASE OR SUPPRESSED SALE. IN THESE C IRCUMSTANCES, ONLY ON THE BASIS OF POWER CONSUMPTION, NO ADDITION COUL D BE OR SUSTAINED.' 13. IT IS APPARENT FROM THE RECORDS THAT THE ASSESS ING OFFICER HAS NOT BROUGHT ON RECORD ANY EVIDENCE STATING LOWER OR SUP PRESSION OF SALES BY THE ASSESSEE. HE TRIED TO SUPPORT HIS CASE BY SHOWI NG DEFICIENCY IN POWER CONSUMPTION BY THE ASSESSEE. BUT THE HON'BLE HIGH COURTS HAVE HELD WITHOUT ANY DIRECT CORROBORATIVE EVIDENCES ON LOW YIELD OR SUPPRESSED SALES, THE DISPARITY OF POWER CONSUMPTIO N CANNOT BE THE SOLE GROUND OR REASON FOR MAKING ADDITION BY THE ASSESSI NG OFFICER. 14. IN VIEW OF THE AFORESAID EXAMINATION OF FACTS A ND JUDICIAL PRONOUNCEMENTS, WE FIND THE ORDER OF THE LD. CIT(A) IS ABSOLUTELY CORRECT AND THEREFORE, THE SAME DOES NOT CALL FOR A NY INTERFERENCE. THUS, GROUND RELATING TO 'ISSUE OF THE LOWER YIELD DECLARED BY THE ASSESSEE' IN ALL THE APPEALS FOR ALL THE ASSESSMENT YEARS ARE THEREFORE DISMISSED. 10. IN THE LIGHT OF THE VIEW TAKEN BY THE CO-ORDINA TE BENCH IN THE CASE OF ASSESSEE IN EARLIER ASSESSMENT YEARS, THE I SSUE IS NO LONGER RES INTEGRA . IT IS EVIDENT THAT ISSUE IS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE FOR AYS. 2009-10 TO 2012-13 WHEREIN ALSO THE APPEAL OF THE R EVENUE WAS DISMISSED AFTER ELABORATE DISCUSSION ON FACTUAL AND LEGAL MATRIX. ITA NO. 62/RPR/2018 (ACIT VS. MAHAMAYA STEEL INDUSTRIES LTD.) A.Y. 2013-14 - 11 - THE REVENUE COULD NOT BRING ANY COGENT REASON TO TA KE A DEPARTURE FROM THE EARLIER VIEW. THUS, IN CONSONANCE WITH TH E VIEW EXPRESSED EARLIER, WE DO NOT SEE ANY MERIT IN THE PLEA OF THE REVENUE FOR RESTORATION OF THE ADDITIONS DELETED BY THE CIT(A) ON THIS SCORE. 11. IN THE RESULT, GROUND NOS. 1 & 2 OF THE REVENUE S APPEAL TOWARDS ALLEGED LOWER YIELD OF PRODUCTION IS DISMIS SED. 12. NEXT GROUND CONCERNS DISALLOWANCE UNDER S.14A O F THE ACT. THE ADDITIONS MADE BY RESORTING TO SECTION 14A OF T HE ACT WERE DELETED BY THE CIT(A) ON THE FOLLOWING REASONINGS: 19. I HAVE CONSIDERED THE GROUNDS OF APPEAL, PERU SED THE ASSESSMENT ORDER OF THE ASSESSING OFFICER AND GONE THOUGH THE SUBMISSIONS MADE BY THE APPELLANT. I OBSERVE THAT THE APPELLANT HAS CLA IMED THAT NO EXPENDITURE WAS INCURRED IN RELATION TO EXEMPT INCO ME AND THAT THE INVESTMENTS WERE MADE IN THE PRECEDING YEARS AND NO T DURING THE YEAR UNDER CONSIDERATION. THE APPELLANT HAS CLAIMED THAT THE CASH PROFITS EARNED BY THE APPELLANT IN THE YEAR IN WHICH THE IN VESTMENTS WERE MADE IN THE SHARES OF GROUP COMPANIES WAS MORE THAN THE AMOUNT OF INVESTMENT IN SHARES. THE DETAILS OF CASH PROFITS EARNED BY THE APPELLANT AND AMOUNT OF INVESTMENT MADE IN SHARES IS REPRODUCED HERE UNDER: PARTICULARS 31.03.2006 31.03.2009 31.03.2010 31.03. 2011 31.03.2012 31.03.2013 PBT 770.52 1329.26 1336.16 1572.94 1119.26 289.27 LESS: CURRENT TAX 0.00 137.00 228.04 357.79 272.30 69.41 LESS: INCOME TAX RELATED TO PREVIOUS YEAR 0.00 0.87 15.00 0.18 -0.02 7.73 LESS: FRINGE BENEFIT TAX 1.12 1.90 0.00 0.00 0.00 0.00 PAT 769.40 1189.49 1093.12 1214.97 846.98 212.13 ADD: DEPRECIATION 161.78 328.26 865.20 731.82 542.46 527.22 CASH PROFIT 931.18 1517.75 1958.32 1946.79 1389.44 739.35 TABLE SHOWING PROPORTION OF INVESTMENT TO CASH PROF IT EARNED BY THE ASSESSEE DURING THE F.Y IN WHICH INVESTMENTS WERE M ADE F.Y INVESTMENT (RS.IN LACS) CASH PROFIT DURING THE YEAR (RS. IN LACS) INVESTMENT TO CASH PROFIT RATIO(%) ITA NO. 62/RPR/2018 (ACIT VS. MAHAMAYA STEEL INDUSTRIES LTD.) A.Y. 2013-14 - 12 - 2005-06 30.01 931.18 3.22 2008-09 200.00 1517.75 13.17 2010-11 10.00 1946.79 0.51 2012-13 282.00 739.35 38.14 ON GOING THROUGH THE ABOVE SUBMISSIONS AND DETAILS OF CASH PROFITS EARNED IN THE RESPECTIVE YEARS AND PROPORTION THERE OF UTILIZED BY THE APPELLANT IN INVESTMENT IN SHARES I FIND THAT THERE WAS SUFFICIENT CASH PROFITS AVAILABLE WITH THE APPELLANT FOR MAKING THE INVESTMENT IN SHARES. WHAT IS IMPORTANT IN THIS REGARD IS THAT TH E APPELLANT HAD SUFFICIENT NON INTEREST BEARING FUNDS FOR MAKING TH E INVESTMENTS IN SHARES OF THE GROUP COMPANIES. THE DISALLOWANCE OF RS.11,61,306/- BY INVOKING SECTION 14A IS UNWARRANTED AND HENCE GROUN D NO. 4 IS ALLOWED. 13. ON PERUSAL OF THE RECORDS AND HAVING REGARD TO THE REPRESENTATION MADE BY BOTH SIDES, WE FIND TWO REAS ONS TO AGREE WITH THE CONCLUSION DRAWN BY THE CIT(A). FIRSTLY, IT EMERGES THAT THE ASSESSE HAS NOT DERIVED ANY EXEMPT INCOME PER SE. IT IS WELL SETTLED THAT IN THE ABSENCE OF ANY EXEMPT INCOME, N O DISALLOWANCE UNDER S.14A OF THE ACT IS PERMISSIBLE IN VIEW OF THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. CORRTECH ENERGY P. LTD. 372 ITR 97 (GUJ.) . IN ANOTHER JUDGMENT IN THE CASE OF CIT VS. VISION FINSTOCK LTD. TAX APPEAL NO. 486 OF 2017 DATED 31.07.2017 THE HONBLE GUJARAT HIGH COURT HAS ONCE AGAIN EXPRESSED THE SIMILAR VIEW AND HELD THAT DISALLOWAN CE OF EXPENDITURE IN TERMS OF SECTION 14A R.W. RULE 8D CA NNOT EXCEED THE EXEMPT INCOME ITSELF. IT IS NOTICED THAT SLP(CIVIL) [DIARY NO. 13152/2018 ] FILED BY THE REVENUE AGAINST THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN VISION FINSTOCK LTD. (SUPRA) HAS BEEN DISMISSED ON MERITS BY THE HONBLE SUPREME COU RT VIDE ORDER DATED 07.05.2018. THE REFERENCE IS ALSO MADE TO TH E DECISION OF HONBLE SUPREME COURT OF INDIA IN CIT VS. CHETTINAD LOGISTICS (P.) LTD. (2018) 95 TAXMANN.COM 250 (SC). 13.1 SECONDLY, THE ASSESSEE HAS DEMONSTRATED SUFFIC IENT NET WORTH FROM WHICH A PRESUMPTION WOULD NATURALLY ARISE THAT INVESTMENT FOR ITA NO. 62/RPR/2018 (ACIT VS. MAHAMAYA STEEL INDUSTRIES LTD.) A.Y. 2013-14 - 13 - THE PURPOSES OF EARNING EXEMPT INCOME IS OUT OF SUC H OWN INTEREST FREE FUNDS AVAILABLE AT THE DISPOSAL OF THE ASSESSE E. A REFERENCE IN THIS REGARD HAS BEEN MADE ON BEHALF OF THE ASSESSEE TO THE SEVERAL JUDICIAL PRECEDENTS INCLUDING CIT VS. HDFC BANK LTD. (2014) 89 CCH 0185 (BOMBAY HIGH COURT); CIT VS. SUZLON ENERGY LTD. (2013) 354 ITR 630 (GUJ.). 13.2 THUS, HAVING REGARD TO ABSENCE OF ANY EXEMPT I NCOME AS WELL AS AVAILABILITY OF SUFFICIENT NET WORTH OF INTEREST FREE NATURE, WE DO NOT SEE ANY REASON TO DIFFER WITH THE VIEW TAKEN BY THE CIT(A). THUS, NO INTERFERENCE WITH THE ORDER OF THE CIT(A) IS CALLED FOR. CONSEQUENTLY, GROUND NO.3 OF REVENUES APPEAL IS DI SMISSED. 14. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. SD/- SD/- (N. K. CHOUDHRY) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S. K. SINHA / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+4 / DR, ITAT, RAIPUR 5. 267 8 / GUARD FILE. BY ORDER 4 SR. PRIVATE SECRETARY ITAT 4 RAIPUR (ON TOUR) ORDER PRONOUNCED ON 21 / 1 0/2021 BY PLACING THE RESULT ON THE NOTICE BOARD AS PER RULE 34(4 ) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULE, 1963.