STARWING DEVELOPERS P.LTD, MUMBAI V. ACIT 8(3), MUMBAI

ITA 7326/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92826 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 04-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 11-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: GAJENDRA H GOLCHHA
• Keywords: Depreciation; Principle of natural justice; Earning of tax free income
• Section: 10; 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI R. C. SHARMA, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS. 7326/MUM/2012 ASSESSMENT YEAR: 2009-10 STARWING DEVELOPERS PVT. LTD. 501, KAATYANI BUSINESS CENTER MIDC, ANDHERI (E) MUMBAI 400 093 PAN:AAACE 2177 K ` .(APPELLANT) VS. ACIT-8(3) AAYAKAR BHAVAN M.K. ROAD MUMBAI 400 020 (RESPONDENT) 7327/MUM/2012 ASSESSMENT YEAR: 2009-10 STARWING CONSTRUCTION PVT. LTD. 501, KAATYANI BUSINESS CENTER MIDC, ANDHERI (E) MUMBAI 400 093 PAN:AABCS 6521 Q ` .(APPELLAN T) VS. ACIT-8(3)(2) AAYAKAR BHAVAN M.K. ROAD MUMBAI 400 020 (RESPONDENT) APPELLANT BY : SHRI GAJENDRA H. GOLCHHA RESPONDENT BY : SHRI NEIL PHILIP DATE OF HEARING : 10.06.2015 DATE OF PRONOUNCEMENT : 10.06.2015 ITA NOS. 7326/MUM/2012 7327/MUM/2012 ASSESSMENT YEAR: 2009-10 2 O R D E R PER SUSHMA CHOWLA, JM: THE APPEAL FILED BY THE ASSESSEE I.E. STARWING DEVE LOPERS PVT. LTD. IS AGAINST ORDERS OF THE CIT(A)-18, MUMBAI DATED 17.10 .2012 RELATING TO ASSESSMENT YEAR 2009-10 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT. FURTHER THE ASSESSEE I.E. STARWING CONSTRUCTIO N PVT. LTD. HAS FILED THE PRESENT APPEAL AGAINST THE ORDER OF CIT(A)-18 MUMBA I DATED 30.10.2012 RELATING TO ASSESSMENT YEAR 2009-10 AGAINST ORDER P ASSED UNDER SECTION 143(3) OF THE ACT. 2. BOTH THE APPEALS RELATING TO RELATED PARTIES WER E HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR T HE SAKE OF CONVENIENCE. 3. THE ASSESSEE IN ITA NO. 7326/MUM/2012 HAS RAISED THE FOLLOWING GROUND OF APPEAL:- THE LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMING T HE ADDITION OF RS.13,15,993/-. THE REASONS ASSIGNED BY HI FOR DOIN G THE SAME ARE WRONG AND INSUFFICIENT. PROVISIONS OF THE ACT OUGHT TO HAVE BEEN PROPERLY CONSTRUED BEFORE DOING THE SAME. REGARD BE ING HAD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE SAID ADDITION OU GHT NOT TO HAVE BEEN MADE. 4. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINS T DELETION OF RS.13,15,993/- 5. BRIEFLY IN THE FACTS OF THE PRESENT CASE, THE AS SESSEE WAS ENGAGED IN THE BUSINESS OF DEVELOPING NEW PREMISES, PROPERTY AND L EASING OUT THE PROPERTY. THE AO NOTED THAT THE ASSESSEE HAD SHOWN INVESTMENT OF RS.3,85,89,389/- AS ON 31.03.2008 AND RS.4,08,35,000/- AS ON 31.03.2009. T HE AO OBSERVED THAT THE ASSESSEE HAD NOT ATTRIBUTED ANY EXPENSES TO CARRY O UT THE ACTIVITY OF INVESTMENT. THE AO SHOW CAUSED THE ASSESSEE AS TO WHY DISALLOWA NCE UNDER SECTION 14A OF THE ACT READ WITH RULE 8D OF IT RULES SHOULD NOT BE MADE IN THE HANDS OF THE ITA NOS. 7326/MUM/2012 7327/MUM/2012 ASSESSMENT YEAR: 2009-10 3 ASSESSEE. IN TURN RELYING ON VARIOUS DECISIONS THAT IS THE DECISION OF SPECIAL BENCH OF TRIBUNAL IN CHEMINVEST LIMITED VS. ITO 317 ITR 86, (AT) AND ALSO THE DECISION OF HONBLE BOMBAY HIGH COURT IN GODREJ BOYCE MANUFACTURING CO. LTD. VS. DCIT (2010) 328 TTK 81 (BOM), THE AO W ORKED OUT THE DISALLOWANCE AS PER RULE 8D AT RS. 13,15,993/-. 6. THE CIT(A) REJECTING THE CONTENTION OF THE ASSES SEE THAT IT HAD ONLY ADVANCED SHARE APPLICATION MONEY AND SHARES WERE NO T ALLOTTED TILL DATE, UPHELD THE ORDER OF THE AO IN DISALLOWING SUM OF RS.13,15, 993/-. 7. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF T HE CIT(A). THE LD. A.R. FOR THE ASSESSEE POINTED OUT THAT THE SAID INVESTME NT WAS NOT CAPABLE OF EARNING ANY INCOME AND HENCE THERE WAS NO MERIT IN MAKING D ISALLOWANCE UNDER SECTION 14A OF THE ACT ON ACCOUNT OF EXPENDITURE RELATABLE TO EARNING OF EXEMPT INCOME. RELIANCE IN THIS REGARD WAS PLACED ON THE D ECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN RAINY INVESTMENT PVT. LTD. VS. ACIT IN ITA NO. 5491/MUM/2011 RELATING TO ASSESSMENT YEAR 2008-09, ORDER DATED 16.01.2013. IT WAS FURTHER POINTED OUT BY THE LD. A.R. FOR THE ASSESSEE THAT THE RELIANCE PLACED UPON BY THE AO ON DECISION OF SPECIAL BENCH IN CHEMINVEST LTD. VS. ITO (SUPRA) WAS MISPLACED AS THE SAID DECISION HAS BEEN OVERRULED BY THE HONBLE ALLAHABAD HIGH COURT IN CIT VS. SHIVAM MOTO RS PVT. LTD. IN ITA NO. 88 OF 2014 RELATING TO ASSESSMENT YEAR 2008-09, JUD GMENT DATED 05.05.2014. IT WAS FURTHER POINTED OUT BY THE LD. A.R. FOR THE ASS ESSEE THAT THE CHENNAI BENCH OF TRIBUNAL IN ACIT VS. M. BASKARAN IN ITA NO. 1717 /MUM/2013 VIDE ORDER DATED 31.07.2014 HAD CONSIDERED ISSUE AT LENGTH AND HELD THAT NO DISALLOWANCE UNDER SECTION 14A OF THE ACT WAS WARRANTED WHERE TH E ASSESSEE HAD NOT EARNED EXEMPT INCOME DURING THE PREVIOUS YEAR. 8. THE LD. D.R FOR THE REVENUE PLACED RELIANCE ON T HE ORDER OF THE CIT(A). ITA NOS. 7326/MUM/2012 7327/MUM/2012 ASSESSMENT YEAR: 2009-10 4 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE SHORT ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE APPLICATION OF PROVISION OF SECTION 14A READ WITH RULE 8D OF I.T. RULES, WHERE THE ASSESSEE HAD MADE INVESTMENT IN SHARE APPLICATION MONEY OF THE SISTER CONCERN. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD MADE INVESTMENT FO R ALLOTMENT OF SHARES IN ITS GROUP COMPANIES AMOUNTING TO RS.4,08,35,000/- AS ON CLOSE OF THE YEAR I.E. 31.03.2009. THE SAID AMOUNT WAS INVESTED BY THE ASS ESSEE WITH SISTER CONCERN FOR THE ALLOTMENT OF SHARES AND THE AMOUNT WAS REFL ECTED AS SHARE APPLICATION MONEY TO THE SISTER CONCERN. NO ALLOTMENT OF SHARES WAS MADE IN FAVOUR OF THE ASSESSEE TILL THE CLOSE OF THE YEARR AND EVEN THERE AFTER. EVEN BEFORE THE CIT(A) THE ASSESSEE HAD CLAIMED THAT NO ALLOTMENT OF SHARE HAD BEEN MADE TILL DATE. HOWEVER, BEFORE US THE CLAIM OF THE ASSESSEE WAS TH AT THE SAID SHARE APPLICATION MONEY HAS BEEN REFUNDED TO THE ASSESSEE AND NO SHAR ES WERE ALLOTTED OUT OF THE SAID SHARE APPLICATION MONEY. THE CLAIM OF THE ASSE SSEE IN THIS REGARD WAS THAT THE ASSET WAS NOT CAPABLE OF GENERATING ANY INCOME, THEN NO EXPENDITURE CAN BE ATTRIBUTED TO EARNING OF ANY EXEMPT INCOME AS AN IN VESTMENT PER SE WAS NOT CAPABLE OF EARNING ANY INCOME. 10. WE FIND THAT SIMILAR ISSUE OF DISALLOWANCE UNDE R SECTION 14A OF THE ACT IN RELATION TO THE SHARE APPLICATION MONEY AROSE BE FORE THE TRIBUNAL IN RAINY INVESTMENT PVT. LTD. VS. ACIT (SUPRA) WHEREIN IT WA S HELD AS UNDER:- 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATE RIAL ON RECORD. SECTION 14A R/W R. 8D IS MANDATORY IN ITS APPLICATI ON WHERE THE ASSESSEE EARNS INCOME WHICH IS CLAIMED TAX- EXEMPT, AS DIVID END INCOME IN THE INSTANT CASE. IN FACT, THERE IS NO DOUBT WITH REGAR D TO THIS; THE ASSESSEE ITSELF CONCEDING TO THE SAME BEFORE US AND, BESIDES , BEING ENGAGED IN THE BUSINESS OF MAKING INVESTMENTS AND EARNING DIVIDEND INCOME AS AN INTEGRAL PART THEREOF. THE ONLY OPTION, THEREFORE, IF IT CONSIDERS THE APPLICATION OF THE PROVISION AS OPERATING TO ITS DE TRIMENT, IS TO FORFEIT ITS RIGHT TO EXEMPTION FROM TAX IN ITS RESPECT. QUA MERITS, WE FIND MUCH FORCE IN THE ASSESSEE'S AR GUMENT THAT 'SHARE APPLICATION MONEY', TO THE EXTENT IT IS ACTUALLY SO , SO THAT IT ONLY ITA NOS. 7326/MUM/2012 7327/MUM/2012 ASSESSMENT YEAR: 2009-10 5 REPRESENTS AMOUNT/S PAID BY WAY OF APPLICATION FOR ALLOTMENT OF SHARES, THE SAME CANNOT BE REGARDED AS AN INVESTMENT IN SHA RES, OR AN ASSET (OR ASSET CLASS) YIELDING TAX-FREE INCOME, AND NEITHER IS IT CAPABLE OF YIELDING ANY TAX-FREE INCOME. THE SAME WOULD, THERE FORE, IN OUR CLEAR VIEW, HAVE TO BE EXCLUDED IN WORKING OUT THE DISALL OWANCE U/R. 8D. FURTHER, THOUGH THE REVENUE HAS NOT \ DISPUTED THE SUMS REFLECTED AS 'SHARE APPLICATION MONEY' IN THE ASSESSEE'S BALANCE -SHEET, THE AO, TO WHOM THE MATTER IS TO BE IN ANY CASE RESTORED FOR W ORKING OUT THE DISALLOWANCE BY EXCLUDING THE SAME, SHALL, IN THE S ET ASIDE PROCEEDINGS, ALSO EXAMINE THE VERACITY OF THE ASSESSEE'S CLAIM W ITH REGARD TO THE SAME BEING 'SHARE APPLICATION MONEY'. THIS IS IN VIEW OF THE PERTINENT QUESTIONS RAISED BY THE BENCH IN ITS RESPECT, TO WH ICH NO SATISFACTORY ANSWER WAS FORTHCOMING DURING HEARING, NOR - TO BE FAIR TO THE LD. AR, COULD POSSIBLY BE IN THE ABSENCE OF ANY DETAILS ON RECORD. WE STATE SO AS THE 'SHARE APPLICATION MONEY' WOULD ORDINARILY ONLY BE 'PUBLIC MONEY' AND, THUS, EXCEPT PERHAPS WHERE TOWARD SHARES OF PR IVATE LIMITED COMPANIES, SUBJECT TO STRINGENT PROCEDURE, AS IS GE NERALLY IN PLACE FOR SUCH FUNDS. WE MAY FURTHER CLARIFY THAT THE EXCLUSI ON OF 'SHARE APPLICATION MONEY', AS OPINED BY US, IS NOT IN THE LEAST FOR THE REASON THAT IT DID NOT YIELD ANY TAX-FREE INCOME FOR THE R ELEVANT YEAR, BUT FOR THE REASON THAT IT IS INCAPABLE OF ANY SUCH INCOME. THE SAME IS ONLY IN THE NATURE OF APPLICATION (OFFER) MONEY, WHICH WOULD TH OUGH, ON ALLOTMENT, GET ADJUSTED AGAINST THE COST OF THE SAID SHARES, A ND ONLY WHEREUPON ANY RIGHTS IN THE INVESTEE COMPANY INURE TO THE ALLOTTE E. NO RIGHTS, NOT EVEN INCHOATE, IN THE SHARE CAPITAL OF THE ISSUING COMPA NY ARISE ON THE PAYMENT OF THE SHARE APPLICATION MONEY, IRRESPECTIV E OF THE RAINY INVESTMENTS PVT. LTD. V. ASST. CIT TIME PERIOD FOR WHICH IT MAY OUTSTAND. THE SAME MAY AT BEST YIELD INTEREST INCOME (FOR WHI CH A SPECIAL PROCEDURE THOUGH HAS TO BE FOLLOWED BY THE COMPANY CONCERNED), WHICH IS IN ANY CASE TAXABLE, SO THAT THERE IS NO SCOPE F OR APPLICATION OF SEC. 14A THEREON. AS SUCH, UPON VERIFICATION OF THE ASSESSEE'S CLAIM WITH REGARD TO THE SHARE APPLICATION MONEY AS ON 31.03.2007 AND 31 .03.2008, AS APPEARING IN ITS BALANCE-SHEET/BOOKS OF ACCOUNT, SO THAT NO SHARES HAD ACTUALLY BEEN ALLOTTED IN ITS RESPECT AS AT THE REL EVANT DATES, THE SAME SHALL BE EXCLUDED BY THE AO FROM THE QUALIFYING AMO UNT IN RECKONING THE AVERAGE INVESTMENT IN WORKING OUT THE DISALLOWANCE UNDER RULES 8D (II) AND 8D(III). THE A.O. WILL DECIDE THE MATTER PER A SPEAKING ORDER, ALLOWING THE ASSESSEE A REASONABLE OPPORTUNITY TO P RESENT ITS CASE BEFORE HIM. WE MAY FURTHER CLARIFY THAT WE HAVING, SUBJECT TO T HE NECESSARY VERIFICATION, ACCEPTED THE ASSESSEE'S SAID CONTENTI ON, AND NO OTHER INFIRMITY IN THE APPLICATION OF RULE 8D HAVING BEEN BROUGHT TO OUR NOTICE, THE A.D. SHALL RESTRICT THE DISALLOWANCE U/ S.14A TO THE AMOUNT SO ITA NOS. 7326/MUM/2012 7327/MUM/2012 ASSESSMENT YEAR: 2009-10 6 DETERMINED. THE ASSESSEE SHALL, NEVERTHELESS, BE AT LIBERTY TO WITHDRAW ITS CLAIM FOR EXEMPTION U/S. 10 ON THE DIVIDEND INC OME, IN WHICH CASE, THERE IS NO SCOPE FOR APPLICATION OF S. 14A AND, CO NSEQUENTLY, OF ANY DISALLOWANCE BEING MADE WITH REFERENCE THERETO. WE DECIDE ACCORDINGLY. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 11. THE ISSUE ARISING BEFORE US IS IDENTICAL TO THE ISSUE BEFORE TRIBUNAL IN RAINY INVESTMENT PVT. LTD. VS. ACIT (SUPRA) AND FOL LOWING THE SAME PARITY OF REASONING, WE HOLD THAT NO DISALLOWANCES UNDER SECT ION 14A OF THE ACT IS TO BE MADE IN RESPECT OF THE INVESTMENT MADE BY THE ASSES SEE IN SHARE APPLICATION MONEY. HOWEVER, RELYING ON THE ORDER OF THE TRIBUNA L WE RESTORE THIS ISSUE BACK TO FILE OF THE AO FOR VERIFYING THE CLAIM OF THE AS SESSEE THAT THE SUCH INVESTMENT IS IN SHARE APPLICATION MONEY AS ON 31.03.2008 AND 31.03.2009. IN CASE THE STAND OF THE ASSESSEE IS FOUND TO BE CORRECT THEN N O DISALLOWANCE IS WARRANTED UNDER SECTION 14A READ WITH RULE 8D OF THE RULES. 12. IN RESPECT OF THE SECOND ASPECT OF THE ISSUE WE ARE IN CONFORMITY WITH THE FINDING OF THE TRIBUNAL IN RAINY INVESTMENT PVT. LT D VS. ACIT (SUPRA) THAT THE DELETION OF ADDITION UNDER SECTION 14A ON ACCOUNT O F SHARE APPLICATION MONEY WAS NOT FOR THE REASON THAT IT DID NOT YIELD ANY TA X FREE INCOME FOR THE RELEVANT YEAR, BUT FOR THE REASON THAT IT WAS INCAPABLE OF G ENERATING ANY SUCH INCOME. ACCORDINGLY, WE HOLD SO. THE GROUND OF APPEAL RAISE D BY THE ASSESSEE IS THUS ALLOWED FOR STATISTICAL PURPOSES. 13. NOW COMING TO THE ITA NO. 7327/MUM/2012, THE AS SESSEE HAS RAISED FOLLOWING GROUND OF APPEAL. 1) THE LEARNED CIT (APPEALS) HAS ERRED IN CONFIRMI NG THE ADDITION OF RS.1,61 ,482/- OUT OF VEHICLE EXPENSES DEBITED TO P ROFIT & LOSS ACCOUNT TREATING THE SAME AS EXPENSES FOR NON-BUSINESS PURP OSES. THE REASONS ASSIGNED BY HIM FOR DOING THE SAME ARE WRONG AND IN SUFFICIENT. PROVISIONS OF THE ACT OUGHT TO HAVE BEEN PROPERLY C ONSTRUED BEFORE DOING THE SAME. REGARD BEING HAD TO THE FACTS AND C IRCUMSTANCES OF THE CASE, THE SAID ADDITION OUGHT NOT TO HAVE BEEN MADE . ITA NOS. 7326/MUM/2012 7327/MUM/2012 ASSESSMENT YEAR: 2009-10 7 2) THE LEARNED CIT (APPEALS) HAS ERRED IN CONFIRMIN G THE ADDITION OF RS.1 ,97,119/- OUT OF PETROL EXPENSES DEBITED TO PR OFIT AND LOSS ACCOUNT TREATING THE SAME AS EXPENSES FOR NON-BUSINESS PURP OSES. THE REASONS ASSIGNED BY HIM FOR DOING THE SAME ARE WRONG AND IN SUFFICIENT. PROVISIONS OF THE ACT OUGHT TO HAVE BEEN PROPERLY C ONSTRUED BEFORE DOING THE SAME. REGARD BEING HAD TO THE FACTS AND C IRCUMSTANCES OF THE CASE, THE SAID ADDITION OUGHT NOT TO HAVE BEEN MADE . 3) THE LEARNED CIT (APPEALS) HAS ERRED IN CONFIRMIN G THE ADDITION OF RS.3,95,230/- OUT OF DEPRECIATION ON MOTOR CAR CLAI MED AS PER INCOME TAX ACT,1961 TREATING THE SAME FOR NON-BUSINESS PUR POSES. THE REASONS ASSIGNED BY HIM FOR DOING THE SAME ARE WRONG AND IN SUFFICIENT. PROVISIONS OF THE ACT OUGHT TO HAVE BEEN PROPERLY C ONSTRUED BEFORE DOING THE SAME. REGARD BEING HAD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE SAID ADDIT ION OUGHT NOT TO HAVE BEEN APPLICABLE. 4) THE LEARNED CIT (APPEALS) HAS ERRED IN NOT SETTI NG OFF THE BROUGHT FORWARD BUSINESS LOSSES. THE REASONS ASSIGNED BY HI M FOR DOING THE SAME ARE WRONG AND INSUFFICIENT. PROVISIONS OF THE ACT OUGHT TO HAVE BEEN PROPERLY CONSTRUED BEFORE DOING THE SAME. REGA RD BEING HAD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE SAID THE B ROUGHT FORWARD BUSINESS LOSS OUGHT TO HAVE BEEN SET-OFF AGAINST TH E ASSESSED INCOME. 14. THE ISSUE IN GROUND OF APPEAL NO. 1 TO 3 ARE AG AINST THE PART DISALLOWANCE MADE OUT OF VEHICLE EXPENSES, PETROL EXPENSES AND D EPRECIATION ON MOTOR CAR. THE SAID DISALLOWANCE WAS MADE IN THE HANDS OF THE ASSESSEE BEING EXPENDITURE FOR NON BUSINESS PURPOSES. BOTH THE AUTHORITIES BEL OW HAVE HELD THAT THE DISALLOWANCE OUT OF THE ABOVE SAID EXPENSES WAS WAR RANTED FOR NON BUSINESS PURPOSES. 15. WE FIND NO MERIT IN THE ORDERS OF THE AUTHORITI ES BELOW AS THIS IS THE CASE OF THE PVT. LTD. COMPANY WHICH WAS ENGAGED IN CARRY ING ON THE BUSINESS. DURING THE YEAR UNDER CONSIDERATION ADMITTEDLY THE ASSESSEE HAD EARNED INCOME FROM LEASING OF PROPERTIES. THOUGH NO CONSTRUCTION ACTIVITY WAS CARRIED OUT BY THE ASSESSEE BUT IT DOES NOT WARRANT THE DISALLOWAN CE OF 75% OF THE EXPENSES FOR NON BUSINESS PURPOSE. REVERSING THE ORDER OF TH E CIT(A), WE DIRECT THE AO TO ALLOW THE EXPENDITURE ON ACCOUNT OF VEHICLE EXP ENSES, PETROL EXPENSES AND ITA NOS. 7326/MUM/2012 7327/MUM/2012 ASSESSMENT YEAR: 2009-10 8 DEPRECIATION ON MOTORCAR. GROUND OF APPEAL NO. 1 T O 3 RAISED BY THE ASSESSEE ARE THUS ALLOWED. 16. THE ISSUE IN GROUND NO. 4 RAISED BY THE ASSESSE E IS AGAINST THE CLAIM OF BROUGHT FORWARD BUSINESS LOSSES. THE SAID ADJUSTMEN T WAS NOT ALLOWED BY THE AO WHICH IN TURN WAS ALSO NOT ALLOWED BY CIT(A), TH OUGH GROUND OF APPEAL WAS RAISED BY THE ASSESSEE IN THIS REGARD. FOLLOWING TH E PRINCIPLES OF NATURAL JUSTICE, WE DEEM IT FIT TO REVERT THIS ISSUE BACK TO THE FI LE OF THE AO, TO VERIFY THE CLAIM OF ASSESSEE AND ALLOW THE ADJUSTMENT OF BROUGHT FOR WARD LOSSES IN ACCORDANCE WITH LAW. GROUND OF APPEAL NO. 4 RAISED BY THE ASSE SSEE IS THUS ALLOWED FOR STATISTICAL PURPOSES. 17. IN THE RESULT, APPEALS FILED BY THE ASSESSEE IN ITA NO. 7326 AND 7327 ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF JUNE, 2015. SD/- SD/- (R. C. SHARMA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATED: 10.06.2015 *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR E BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.