ACIT 3(1)(2), MUMBAI V. EDELCAP SECURITIES LTD, MUMBAI

ITA 6457/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 8005 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 02-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S ABIRAMA KARTHIKEYAN LD
• Assessee Lawyers: RAVIKANT S PATHAK LD
• Keywords: Earning of tax free income; Revised return
• Section: 143(3); 14A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , BEFORE HONBLE SHRI PAWAN SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM 1. ./I.T.A. NO.6457/MUM/2017 ( / ASSESSMENT YEAR: 2012-13) ASST. COMMISSIONER OF I NCOME TAX-3(1)(2) 6 TH FLOOR, ROOM NO.607 AAYKAR BHAVAN, M.K.ROAD CHURCHGATE, MUMBAI-20 / VS. EDELCAP SEC URITIES LTD. EDELWEISS HOUSE CST ROAD, KALINA MUMBAI 400 098 ./ ./PAN/GIR NO. AABCE-9000-A ( /APPELLANT ) : ( !' / RESPONDENT ) & 2. ./I.T.A. NO.6458/MUM/2017 ( / ASSESSMENT YEAR: 2012-13) ASS T. COMMISSIONER OF I NCOME TAX-3(1)(2) 6 TH FLOOR, ROOM NO.607 AAYKAR BHAVAN, M.K.ROAD CHURCHGATE, MUMBAI-20 / VS. E C COMMODITY LTD. EDELWEISS HOUSE CST ROAD, KALINA MUMBAI 400 098 ./ ./PAN/GIR NO. AACCE-0324-Q ( /APPELLANT ) : ( !' / RESPONDENT ) & 3. ./I.T.A. NO.6456/MUM/2017 ( / ASSESSMENT YEAR: 2011-12) ASST. COMMISSIONER OF I NCOME TAX-3(1)(2) 6 TH FLOOR, ROOM NO.607 AAYKAR BHAVAN, M.K.ROAD CHURCHGATE, MUMBAI-20 / VS. EDEL WEISS FINANCE & INVESTMENT LTD. EDELWEISS HOUSE CST ROAD, KALINA MUMBAI 400 098 ./ ./PAN/GIR NO. AAACC-2233-N ( /APPELLANT ) : ( !' / RESPONDENT ) & 4. ./I.T.A. NO.6459/MUM/2017 ( / ASSESSMENT YEAR: 2011-12) ASST. COMMISSIONER OF I NCOME TAX-3(1)(2) 6 TH FLOOR, ROOM NO.607 / VS. E CL F INANCE LTD. EDELWEISS HOUSE CST ROAD, KALINA 2 AAYKAR BHAVAN, M.K.ROAD CHURCHGATE, MUMBAI-20 MUMBAI 400 098 ./ ./PAN/GIR NO. AABCE-4916-D ( /APPELLANT ) : ( !' / RESPONDENT ) & 5. ./I.T.A. NO.6455/MUM/2017 ( / ASSESSMENT YEAR: 2012-13) ASST. COMMISSIONER OF I NCOME TAX-3(1)(2) 6 TH FLOOR, ROOM NO.607 AAYKAR BHAVAN, M.K.ROAD CHURCHGATE, MUMBAI-20 / VS. E CL F INANCE LTD. EDELWEISS HOUSE CST ROAD, KALINA MUMBAI 400 098 ./ ./PAN/GIR NO. AABCE-4916-D ( /APPELLANT ) : ( !' / RESPONDENT ) ASSESSEE BY : RAVIKANT S. PATHAK - LD.AR REVENUE BY : S.ABIRAMA KARTHIKEYAN, LD. DR / DATE OF HEARING : 02/01/2019 / DATE OF PRONOUNCEMENT : 08/01/2019 / O R D E R PER BENCH 1. AFORESAID APPEALS BY REVENUE FOR DIFFERENT ASSES SMENT YEARS [AY] CONTEST SEPARATE ORDERS OF FIRST APPELLATE AUTHORIT Y. SINCE COMMON ISSUES ARE INVOLVED, WE PROCEED TO DISPOSE-OFF THE SAME BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 1. ITA 6457/MUM/2017 : AY 2012-13, M/S EDELCAP SEC URITIES LTD. 2.1 AFORESAID APPEAL BY REVENUE FOR AY 2012-13 CONT EST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-8, MUMBAI [CIT(A)], APPEAL NO. CIT(A)-8/IT-271/15-16 DATED 14/07/2017 QUA DELETION OF DISALLOWANCE U/S 14A FOR RS.167.80 LACS AND DELETIO N OF PROVISION FOR MARK TO MARKET LOSSES [MTM] FOR RS.349.82 LACS. 3 2.2 THE ASSESSEE BEING RESIDENT CORPORATE ENTITY, STATED TO BE ENGAGED IN THE BUSINESS OF TRADING & ARBITRAGE OF COMMODITIES, SECURITIES & DERIVATIVE INSTRUMENTS, WAS ASSESSED FOR IMPUGNED AY U/S 143(3) ON 30/03/2015 WHEREIN THE INCOME OF THE ASSESSEE WAS D ETERMINED AT RS.766.55 LACS UNDER NORMAL PROVISIONS AFTER CERTAI N DISALLOWANCES / ADJUSTMENTS AS AGAINST REVISED RETURNED INCOME OF R S.233.82 LACS FILED BY THE ASSESSEE ON 31/10/2012. 2.3 DURING ASSESSMENT PROCEEDINGS, IT TRANSPIRED TH AT THE ASSESSEE CLAIMED DEDUCTION ON ACCOUNT OF PROVISION FOR LOSS ON CURRENCY FUTURES, COMMODITIES FUTURES, EQUITY STOCK / INDEX FUTURE AN D EQUITY STOCK / INDEX OPTION AMOUNTING TO RS.353.28 LACS, THE DETAILS OF WHICH HAVE ALREADY BEEN EXTRACTED IN PARA 4.1 OF THE QUANTUM ASSESSMENT ORDER. THE LD. AO VIEWING THE SAME AS CONTINGENT LIABILITY PROCEED ED TO DISALLOW THE SAME. THE ASSESSEE, VIDE REPLY DATED 12/02/2015, DE FENDED THE SAME BY SUBMITTING THAT THE UNREALIZED GAIN OF RS.317.73 LACS WERE CREDITED TO PROFIT & LOSS ACCOUNT AND THEREFORE, CORRESPONDING UNREALIZED LOSS WAS ALLOWABLE TO THE ASSESSEE. IT WAS SUBMITTED THAT TH E AFORESAID ACCOUNTING TREATMENT WAS IN ACCORDANCE WITH ACCOUNTING STANDARD-30: FINANCIAL INSTRUMENTS: RECOGNITION AND MEASUREMENT & GUIDANCE NOTE ON ACCOUNTING FOR EQUITY INDEX AND EQUITY STOCK FUT URES AND OPTIONS ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA [ICAI] . HOWEVER, NOT CONVINCED, LD. AO, TREATING THE SAME A S CONTINGENT LIABILITY, DISALLOWED THE SAME. 2.4 THE ASSESSEE WAS SADDLED WITH ANOTHER DISALLOWA NCE U/S 14A IN VIEW OF THE FACT THAT IT EARNED EXEMPT DIVIDEND INC OME OF RS.50.02 LACS FROM SHARES / MUTUAL FUNDS AND OFFERED SUO-MOTO DISALLOWANCE AGAINST THE SAME FOR RS.2.32 LACS IN THE RETURN OF INCOME. HOWEVER, LD. AO, BY 4 APPLYING RULE 8D, WORKED AT AGGREGATE DISALLOWANCE OF RS.167.80 LACS WHICH COMPRISED-OFF OF INTEREST DISALLOWANCE U/R 8D (2)(II) FOR RS.150.49 LACS AND EXPENSE DISALLOWANCE U/R 8D(2)(III) FOR RS .17.30 LACS. AFTER ADJUSTING SUO-MOTO DISALLOWANCE OFFERED BY THE ASSESSEE, NET DISALLOWANCE THUS MADE WORKED OUT TO RS.165.47 LACS WHICH WAS ADDED TO THE INCOME OF THE ASSESSEE. 3. THE LD. CIT(A) DELETED BOTH THE ADDITIONS BY REL YING UPON ITS OWN DECISION IN ASSESSEES OWN CASE FOR AY 2011-12. AGG RIEVED THE REVENUE IS IN FURTHER APPEAL BEFORE US. 4.1 THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE [AR], AT THE OUTSET, SUBMITTED THAT THE STAND OF FIRST APPELLATE AUTHORITY QUA DELETION OF PROVISION FOR MTM LOSSES IN AY 2011-12 HAS BEEN CONFIRMED BY THE TRIBUNAL VIDE ITA NO. 4263/MUM/2016 ORDER DATED 09/11/2017 WHEREIN THE MATTER WAS CONCLUDED IN THE FOLLOWING MANNER: - ISSUE NO. 1:- 4. UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE DELETION OF THE ADDITION OF RS.5,20,75,140/- MADE BY AO ON ACCOUNT OF MARK TO MARKET LOSS CLAIMED BY THE ASSESSEE IN DERIVATIVE TRANSACTION. THE LD. REPRESENTATIVE OF THE REVENUE HAS ARGUED THAT THE L OSS CLAIMED ON THE BASIS OF THE VALUE DERIVATIVE AS ON 31ST MARCH IS MERELY A NOTIONAL LOSS AND THE ACT UAL LOSS OR THE PROFIT OF SUCH DERIVATIVE TRANSACTION WOULD BE CRYSTALLIZED ONLY AT THE TIME OF SETTLEMENT OF SUCH TRANSACTION, THEREFORE, THE FINDING OF THE CIT(A) ON THIS ISSUE IS WRONG AGAINS T LAW AND FACTS AND IS LIABLE TO BE SET ASIDE. HOWEVER, ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS STRONGLY RELIED UPON THE FINDING OF THE CIT(A) IN QUESTION. WE HAVE HEARD TH E ARGUMENT ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. WE NOTICED THAT THE ASSESSEE INITIALLY CLAIMED THE MARK TO MARKET (MTM) PROVISION FOR AMOUNT ON DERIVATIVE INSTRUMENT WHICH WAS DISALLOWED BY THE AO. IN APPEAL, THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND OF THE DECISION OF THE HONBLE ITAT IN SEVERAL CASES. THE CIT(A) HAS RELIED UPON THE FOLLO WING CASES:- 1. EDELWEISS CAPITAL LIMITED VS. ITO (ITA. NO.5324/ M/2007) 2. EDELWEISS SECURITIES ITA NO. 4263/MUM/2016 A.Y. 2011-12 3. DCIT VS. EDELWEISS SECURITIES LIMITED(ITA 7792/M /2012) 4. DCIT VS. ECL FINANCE LIMITED (ITA 7656/M/2011) 5. DCIT VS. KOTAK MAHINDRA INVESTMENT LIMITED(ITA 1 502/M/2012 6. SHRI RAMESH KUMAR DAMANI VS. ADDLL. CIT (ITA 809 /M/2009) 7. M/S EKANSHA ENTERPRISES P. LTD. VS. DCIT (ITA 80 9/M/2012) 8. ACIT VS. SURYAKANT D. NISSAR (ITA 2750/M/2010) 9. DCIT VS. EDELWEISS SECURITIES LIMITED (ITA 5939/ M/2011) 5. THE FINDING OF THE CIT(A) IS HEREBY TO REPRODUCE AS UNDER:- 5.1.1 THESE GROUNDS PERTAINS TO DISALLOWANCE OF PR OVISION ON MARK TO MARKET ON TRADING OF DERIVATIVE INSTRUMENT OF RS.5,20,75,140/- BY TREATI NG IT AS NOTIONAL LOSS. THIS ISSUE HAS BEEN 5 DEALT WITH UNDER PARA 4 OF ASSESSING OFFICERS ORDER . ESSENTIAL HE HAS TREATED THE SAME AS NOTIONAL LOSS FOR WHICH LIABILITY HAS NOT CRYSTALLI ZED AND HAS HELD IT AS NON DEDUCTIBLE. 5.1.2 I FIND THAT THIS IS COVERED ISSUE IN FAVOUR O F THE APPELLANT IN JURISDICTIONAL MUMBAI ITAT IN THE FOLLOWING CASES RELIED UPON BY THE APPELLANT : 1. EDELWEISS CAPITAL LIMITED VS. ITO (ITA. NO.5324/ M/2007) 2. EDELWEISS SECURITIES LIMITED VS. ADDLL. CIT(ITA 2193/M/2009) 3. DCIT VS. EDELWEISS SECURITIES LIMITED(ITA 7792/M /2012) 4. DCIT VS. ECL FINANCE LIMITED (ITA 7656/M/2011) 5. DCIT VS. KOTAK MAHINDRA INVESTMENT LIMITED(ITA 1 502/M/2012 6. SHRI RAMESH KUMAR DAMANI VS. ADDLL. CIT (ITA 809 /M/2009) 7. M/S EKANSHA ENTERPRISES P. LTD. VS. DCIT (ITA 80 9/M/2012) 8. ACIT VS. SURYAKANT D. NISSAR (ITA 2750/M/2010) 9. DCIT VS. EDELWEISS SECURITIES LIMITED (ITA 5939/ M/2011) IN VIEW OF THE DIRECT DECISIONS ON THE ISSUE FROM J URISDICTIONAL ITAT THE DISALLOWANCE OF RS.5,20,75,140/- MADE ON THIS ACCOUNT IS DELETED. T HESE GROUNDS OF APPEAL ARE ALLOWED. 6. ON APPRAISAL OF THE ABOVE SAID FINDING, WE NOTIC ED THAT THE CLAIM OF THE ASSESSEE HAS DULY COVERED BY THE ASSESSEES OWN CASE IN ITA. NO.2193/ M/2009 IN WHICH THE CLAIM OF THE ASSESSEE HAS BEEN ALLOWED. THE OTHER LAW MENTIONED ABOVE AND RELIED UPON BY THE CIT(A) ALSO SPEAKS ABOUT ALLOWANCE BY CLAIM OF THE ASSESSE E. SINCE, THE ISSUE IN QUESTION HAS DULY BEEN COVERED BY THE ABOVE MENTIONED CASES. THEREFOR E, WE ARE OF THE VIEW THAT THE FINDING OF THE CIT(A) IS QUITE CORRECT AND IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THIS ISSUE IS HEREBY DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. NO CONTRARY JUDGMENT COULD BE BROUGHT ON RECORD BY THE REVENUE TO REBUT THE SAME. RESPECTFULLY FOLLOWING THE SAME, WE CONFIRM THE STAND OF FIRST APPELLATE AUTHORITY ACCORDINGLY, THIS GROUND STANDS DISMISSED. 4.2 SO FAR AS THE DISALLOWANCE U/S 14A IS CONCERNED , WE FIND THAT IT IS UNDISPUTED FACT THAT ASSESSEES OWN FUNDS FAR EXCEE DED THE INVESTMENTS MADE BY THE ASSESSEE, THE DETAILS OF WHICH HAVE BEE N PLACED ON RECORD. THEREFORE, IN TERMS OF BINDING DECISION OF HONBLE BOMBAY HIGH COURT RENDERED IN CIT VS. RELIANCE UTILITIES & POWER LTD. [313 ITR 34 0] & CIT VS. HDFC BANK LTD. [366 ITR 505], A PRESUMPTION WAS TO BE DRAWN IN ASSESSEES FAVOR THAT THE INVESTMENTS WERE MADE OUT OF INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE UNLESS THE REVENU E AUTHORITIES COULD PROVE THE NEXUS OF BORROWED FUNDS WITH THE INVESTME NTS MADE BY THE ASSESSEE. NOTHING ON RECORD SUGGEST SUCH NEXUS. THE REFORE, INTEREST DISALLOWANCE U/R 8D(2)(II) COULD NOT BE HELD TO BE JUSTIFIED. WE ORDER SO. 6 4.3 SO FAR AS THE EXPENSE DISALLOWANCE IS CONCERNED , LD. AR HAS PLACED ON RECORD THE DETAILS OF INVESTMENTS WHICH H AVE ACTUALLY YIELDED THE EXEMPT INCOME DURING THE IMPUGNED AY. THE AVERA GE OF THESE INVESTMENTS WORKS OUT TO RS.340.60 LACS & 0.5% OF T HE SAME COMES TO RS.1,70,301/- WHICH IS LESS THAN SUO-MOTO DISALLOWANCE OF RS.2,32,758/- ALREADY OFFERED BY THE ASSESSEE. THIS COMPUTATION I S IN LINE WITH THE DECISION OF DELHI TRIBUNAL (SPECIAL BENCH) RENDERED IN ACIT VS. VIREET INVESTMENT (P.) LTD. [82 TAXMANN.COM 415] WHEREIN IT HAS BEEN HELD THAT ONLY EXEMPT INCOME YIELDING INVESTMENTS WERE T O BE CONSIDERED TO ARRIVE AT THE SAID DISALLOWANCE. THEREFORE, THE ADD ITIONAL EXPENSE DISALLOWANCE, AS COMPUTED BY LD. AO COULD NOT BE SU STAINED. THEREFORE, WE FIND NO INFIRMITY IN THE STAND OF LD. FIRST APPE LLATE AUTHORITY. 4.4 THE APPEAL OF THE REVENUE STANDS DISMISSED. 2. ITA 6458/MUM/2017 : AY 2012-13, M/S EC COMMODIT IES LTD. 5.1 SIMILARLY AGGRIEVED BY DELETION OF DISALLOWANCE U/S 14A AS WELL AS DELETION OF MTM LOSSES , THE REVENUE HAS CHALLENGED THE ORDER OF FIRST APPELLATE AUTHORITY. THE LD. CIT (A) HAS DELETED TH E SAME BY FOLLOWING ITS OWN DECISION IN ASSESSEES GROUP COMPANIES. FAC TS AND CIRCUMSTANCES BEING PARI-MATERIA THE SAME, RESPECTFULLY FOLLOWING THE BINDING DECISION OF THIS TRIBUNAL IN ASSESSEES GRO UP CONCERNS, WE CONFIRM THE STAND OF FIRST APPELLATE AUTHORITY IN D ELETING THE MTM LOSSES. THIS GROUND STANDS DISMISSED. 5.2 THE ASSESSEE HAS BEEN SADDLED WITH AGGREGATE DI SALLOWANCE U/S 14A READ WITH RULE 8D FOR RS.18.56 LACS WHICH COMPRISED-OFF OF INTEREST DISALLOWANCE U/R 8D(2)(II) FOR RS.17.28 LACS AND EX PENSE DISALLOWANCE U/R 8D(2)(III) FOR RS.1.28 LACS. NO SUO-MOTO DISALLOWANCE HAS BEEN 7 OFFERED IN VIEW OF THE FACT THAT NO EXEMPT INCOME H AS BEEN EARNED BY THE ASSESSEE DURING IMPUGNED AY. THE ASSESSEES SUB MISSIONS AS EXTRACTED IN THE QUANTUM ASSESSMENT ORDER REVEAL TH AT ASSESSEES OWN FUNDS FAR EXCEEDED THE INVESTMENT AND THEREFORE, NO INTEREST DISALLOWANCE WAS JUSTIFIED IN THE ABSENCE OF NEXUS OF BORROWED FUNDS WITH THE INVESTMENTS. SO FAR EXPENSES DISALLOWANCE IS CONCERNED, IT IS UNDISPUTED FACT THAT NO EXEMPT INCOME HAS BEEN EARN ED BY THE ASSESSEE DURING IMPUGNED AY AND THEREFORE, NO DISAL LOWANCE ON THIS ACCOUNT WAS WARRANTED IN TERMS OF OBSERVATION OF HO NBLE BOMBAY HIGH COURT (NAGPUR BENCH) RENDERED IN PCIT VS. BALLARPUR INDUSTRIES LTD. [ITA NO. 51 OF 2016 DATED 13/10/2016]. RESPECTFULLY FOLLOWING THE SAME, WE CONFIRM THE STAND OF FIRST APPELLATE AUTHORITY. 5.3 THE APPEAL STANDS DISMISSED. 3. ITA 6456/MUM/2017 : AY 2011-12, M/S EDELWEISS FI NANCE & INVESTMENT LTD. 6.1 THE REVENUE IS SIMILARLY AGGRIEVED BY DELETION OF DISALLOWANCE U/S 14A AS WELL AS DELETION OF MTM LOSSES BY FIRST APPELLATE AUTHORITY. THE LD. CIT (A) HAS DELETED BOTH THE ADDITIONS BY RELYI NG UPON ITS STAND IN ASSESSEES OWN CASE FOR AY 2011-12. FACTS AND CIRCU MSTANCES BEING PARI-MATERIA THE SAME, RESPECTFULLY FOLLOWING THE BINDING DECISI ON OF THIS TRIBUNAL IN ASSESSEES OWN CASE AS WELL AS IN THE C ASE OF GROUP CONCERNS, WE CONFIRM THE STAND OF FIRST APPELLATE A UTHORITY IN DELETING THE MTM LOSSES. THIS GROUND STANDS DISMISSED. 6.2 THE ASSESSEE HAS BEEN SADDLED WITH AGGREGATE DI SALLOWANCE U/S 14A READ WITH RULE 8D FOR RS.586.12 LACS WHICH COMPRISED-OFF OF INTEREST DISALLOWANCE U/R 8D(2)(II) FOR RS.526.88 L ACS AND EXPENSE 8 DISALLOWANCE U/R 8D(2)(III) FOR RS.59.24 LACS. THE ASSESSEE HAS OFFERED SUO-MOTO DISALLOWANCE OF RS.7.52 LACS AGAINST EXEMPT INCOME OF RS.36,360/-. THE ASSESSEES SUBMISSIONS AS EXTRACTE D IN THE QUANTUM ASSESSMENT ORDER REVEAL THAT ASSESSEES OWN FUNDS F AR EXCEEDED THE INVESTMENT AND THEREFORE, NO INTEREST DISALLOWANCE WAS JUSTIFIED IN THE ABSENCE OF NEXUS OF BORROWED FUNDS WITH THE INVESTM ENTS. SO FAR EXPENSES DISALLOWANCE IS CONCERNED, IT IS FOUND THA T THE ASSESSEE HAD ALREADY DISALLOWED A SUM OF RS.7.52 LACS AGAINST EX EMPT INCOME OF RS.0.36 LACS AND THEREFORE, NO FURTHER ADDITION, IN THIS REGARD WAS JUSTIFIED. HENCE, WE CONFIRM THE STAND OF FIRST APP ELLATE AUTHORITY. 6.3 THE APPEAL STANDS DISMISSED. 4. ITA 6459/MUM/2017 : AY 2011-12, M/S ECL FINANCE LTD. 7.1 SIMILARLY AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US AGAINST THE STAND OF FIRST APPELLATE AUTHORITY IN D ELETING DISALLOWANCE U/S 14A AS WELL AS MTM LOSSES . THE LD. CIT (A) HAS DELETED BOTH THE ADDITIONS BY RELYING UPON ITS STAND IN ASSESSEES G ROUP COMPANIES, THE DETAILS OF WHICH HAS ALREADY BEEN GIVEN IN THE IMPU GNED ORDER. FACTS AND CIRCUMSTANCES BEING PARI-MATERIA THE SAME, RESPECTFULLY FOLLOWING THE BINDING DECISION OF THIS TRIBUNAL IN ASSESSEES GROUP CONCERNS, WE CONFIRM THE STAND OF FIRST APPELLATE AUTHORITY IN D ELETING THE MTM LOSSES. THIS GROUND STANDS DISMISSED. 7.2 THE ASSESSEE HAS BEEN SADDLED WITH AGGREGATE DI SALLOWANCE U/S 14A READ WITH RULE 8D FOR RS.65.45 LACS WHICH COMPRISED-OFF OF INTEREST DISALLOWANCE U/R 8D(2)(II) FOR RS.35.64 LACS AND EX PENSE DISALLOWANCE U/R 8D(2)(III) FOR RS.29.80 LACS. THE ASSESSEE HAS OFFERED SUO-MOTO DISALLOWANCE OF RS.4.63 LACS AGAINST EXEMPT INCOME OF RS.14.29 LACS. 9 THE ASSESSEES SUBMISSIONS AS EXTRACTED IN THE QUAN TUM ASSESSMENT ORDER REVEAL THAT ASSESSEES OWN FUNDS FAR EXCEEDED THE INVESTMENT AND THEREFORE, NO INTEREST DISALLOWANCE WAS JUSTIFIED I N THE ABSENCE OF NEXUS OF BORROWED FUNDS WITH THE INVESTMENTS. SO FAR EXPE NSES DISALLOWANCE IS CONCERNED, IT IS FOUND THAT 0.5% OF AVERAGE VALUE O F INVESTMENTS WHICH HAVE YIELDED EXEMPT INCOME DURING IMPUGNED AY WORKS OUT TO RS.1.96 LACS AS AGAINST SUO-MOTO DISALLOWANCE OF RS.4.63 LACS ALREADY OFFERED BY THE ASSESSEE AND THEREFORE, NO FURTHER DISALLOWA NCE WAS WARRANTED. THE STAND OF FIRST APPELLATE AUTHORITY STANDS CONFI RMED. 7.3 THE APPEAL STANDS DISMISSED. 5. ITA 6455/MUM/2017 : AY 2012-13, M/S ECL FINANCE LTD. 8.1 SIMILARLY AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US AGAINST THE STAND OF FIRST APPELLATE AUTHORITY IN D ELETING DISALLOWANCE U/S 14A AS WELL AS MTM LOSSES . THE LD. CIT (A) HAS DELETED BOTH THE ADDITIONS BY RELYING UPON ITS STAND IN ASSESSEES G ROUP COMPANIES, THE DETAILS OF WHICH HAS ALREADY BEEN GIVEN IN THE IMPU GNED ORDER. FACTS AND CIRCUMSTANCES BEING PARI-MATERIA THE SAME, RESPECTFULLY FOLLOWING THE BINDING DECISION OF THIS TRIBUNAL IN ASSESSEES GROUP CONCERNS, WE CONFIRM THE STAND OF FIRST APPELLATE AUTHORITY IN D ELETING THE MTM LOSSES. THIS GROUND STANDS DISMISSED. 8.2 THE ASSESSEE HAS BEEN SADDLED WITH AGGREGATE DI SALLOWANCE U/S 14A READ WITH RULE 8D FOR RS.395.51 LACS WHICH COMPRISED-OFF OF INTEREST DISALLOWANCE U/R 8D(2)(II) FOR RS.253.17 L ACS AND EXPENSE DISALLOWANCE U/R 8D(2)(III) FOR RS.142.34 LACS. THE ASSESSEE HAS OFFERED SUO-MOTO DISALLOWANCE OF RS.4.73 LACS AGAINST EXEMPT INCOME OF RS.9.68 LACS. THE ASSESSEES SUBMISSIONS AS EXTRACT ED IN THE QUANTUM 10 ASSESSMENT ORDER REVEAL THAT ASSESSEES OWN FUNDS F AR EXCEEDED THE INVESTMENT AND THEREFORE, NO INTEREST DISALLOWANCE WAS JUSTIFIED IN THE ABSENCE OF NEXUS OF BORROWED FUNDS WITH THE INVESTM ENTS. SO FAR EXPENSES DISALLOWANCE IS CONCERNED, IT IS FOUND THA T THE ASSESSEE HAD ALREADY OFFERED DISALLOWANCE OF RS.4.73 LACS AGAINS T EXEMPT INCOME OF RS.9.68 LACS WHICH WAS MORE THAN SUFFICIENT, KEEPIN G IN VIEW OVERALL FACTS. THEREFORE, NO FURTHER DISALLOWANCE WAS WARRA NTED. THE STAND OF FIRST APPELLATE AUTHORITY STANDS CONFIRMED. 8.3 THE APPEAL STANDS DISMISSED. CONCLUSION 9. ALL THE APPEALS STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH JANUARY, 2019. SD/- SD/- (PAWAN SINGH) ( MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 08/01/2019 SR.PS:- JAISY VARGHESE !'#' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. ) ( ) / THE CIT(A) 4. ) / CIT CONCERNED 5. * +!$, , , , / DR, ITAT, MUMBAI 6. + -. / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.