The Dy. Commissioner of Income Tax, Bathinda V. M/s Dabwali Transport Company Ltd, Bathinda

ITA 76/ASR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7734 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-06-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 03-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL DHAWANLD
• Assessee Lawyers: ADITYA KUMAR LD CAS
• Keywords: Earning of tax free income; Reassessment proceedings
• Section: 143(3); 14A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. T.S. KAPOOR, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A NO.76(ASR)/2017 ASSESSMENT YEAR:2012-1 3 DY. CIT, BATHINDA. VS. M/S DABWALI TRANSPORT COMPANY LTD., CIVIL LINES, BATHINDA. PAN:AAACT-5071B (APPELLANT) (RESPONDENT) APPELLANT BY: SH. RAHUL DHAWAN (LD. DR) RESPONDENT BY: SH. ASHWANI KUMAR & SH. ADITYA KUMAR (L D. CAS) DATE OF HEARING: 14.09.2017 DATE OF PRONOUNCEMENT: 31.10.2017 ORDER PER N.K.CHOUDHRY: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE REVENUE DEPARTMENT, ON FEELING AGGRIEVED AGAINST THE ORDER D ATED 20.10.2016 PASSED BY THE LD. CIT(A), BATHINDA, FOR ASST. YEAR: 201 2-13. 2. THE REVENUE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. THE LD. CIT (A) HAS ERRED IN HOLDING THAT NO DISALL OWANCES U/S 14A COULD BE MADE IF THE ASSESSEE HAD NOT EARNED ANY EX EMPT INCOME DURING THE YEAR EVEN THOUGH THE CBDT VIDE CIRCULAR NO. 5/2 014 DATED 11.02.2014 HAS CLARIFIED THAT RULE 8D READ WITH SECTION 14A OF THE ACT PROVIDED FOR DISALLOWANCE OF THE EXPENDITURE EVEN WHERE TAX PAYE R IN A PARTICULAR YEAR HAD NOT EARNED ANY EXEMPT INCOME. 2. THE LD. CIT (A) HAS ERRED IN HOLDING THAT NO DISALLOWANCE U/S 14A COULD BE MADE AS THE INVESTMENTS IN SHARES WERE MAD E OUT OF INTEREST-FREE FUNDS BEING SHARE CAPITAL AND RESERVES AND SURPLUS, IGNORING THE FACT THAT ITA NO.76 (ASR)/2017 ASST. YEAR: 2012-13 2 THE INTEREST FREE FUNDS WERE ALREADY UTILIZED BY TH E ASSESSEE IN BUSINESS ASSETS AND INTEREST BEARING FUNDS WERE RAISED TO ME ET THE DEFICIT. 3. THE LD. CIT(A) HAS ERRED IN HOLDING THAT NO D ISALLOWANCE U/S 14A COULD BE MADE IGNORING THE ORDER OF THE HON'BLE DEL HI HIGH COURT IN THE CASE OF CIT VS. TAIKISHA ENGINEERING INDIA LTD., 37 0 1TR 338, HOLDING THAT CLAUSE (II) TO SUB RULE (2) OF RULE 8D EXPRESSLY PR OVIDED THAT WHERE THE ASSESSEE HAD INCURRED EXPENDITURE BY WAY OF INTERES T IN THE PREVIOUS YEAR AND THE INTEREST PAID WAS NOT DIRECTLY ATTRIBUTABLE TO ANY PARTICULAR INCOME OR RECEIPT, EVEN THEN THE FORMULA PRESCRIBED UNDER RULE 8D WOULD APPLY. 4. THE LD. CIT(A) HAS ERRED IN HOLDING THAT NO DISALLOWANCE U/S 14A COULD BE MADE IGNORING THAT SECTION 14A(3) SPECIFIC ALLY PROVIDES THAT PROVISIONS OF SECTION 14A(2) WOULD APPLY EVEN IN RE LATION TO A CASE WHERE THE ASSESSEE CLAIMED THAT NO EXPENDITURE HAD BEEN I NCURRED IN RELATION TO INCOME WHICH DID NOT FORM PART OF THE TOTAL INCOME. 5. THE LD. CIT (A) HAS ERRED IN HOLDING THAT INT EREST FREE FUNDS EXCEEDED THE VALUE OF INVESTMENTS IN SHARES, IGNORING THAT T HE BURDEN WAS UPON THE ASSESSEE TO SHOW AND PROVE THAT INTEREST FREE FUNDS EXCEEDED THE VALUE OF INVESTMENTS AS HELD BY THE HONBLE KARNATAKA HIGH C OURT IN BHARAT BEEDI WORKS (P) LTD. VS. ADDL. CIT, 74 TAXMAN.COM 95 AND THAT IN THE PRESENT CASE, THE SAID BURDEN HAD NOT BEEN DISCHARGED SATIS FACTORILY BY THE ASSESSEE. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THAT THE ASSESSEE IS A LIMITED COMPANY, FILED ITS RETURN OF INCOME FOR THE ASST. YEAR 2012-13 ON 30.09.2012, DECLAR ING TOTAL INCOME OF RS.13,60,37,129/- AND THE CASE WAS SELECTE D THROUGH CASS AND WAS ASSESSED AT INCOME OF RS.14,30,34,50 0/- VIDE ORDER DATED 31 ST MARCH, 2015 U/S 143(3) OF THE I.T. ACT BY MAKING ADDITION OF RS.65,97,366/- U/S 14A AND RS.4,00, 000/- ON ACCOUNT ON UNVERIFIABLE /UNVOUCHED EXPENSES. THE ASSESSMENT ORDER WAS CHALLENGED BEFORE THE LD. CIT(A), WHO ALLOW ED THE APPEAL OF THE ASSESSEE. 4. ON FEELING AGGRIEVED AGAINST THE SAID ORDER PASSED BY THE LD. CIT(A), THE REVENUE DEPARTMENT PREFERRED THE INSTANT APPEAL AND IN SUPPORT OF ITS CASE SUBMITTED THAT:- ITA NO.76 (ASR)/2017 ASST. YEAR: 2012-13 3 THE CIT(A), BATHINDA HAS ERRED IN HOLDING THAT NO DISALLOWANCE U/S 14A OF THE ACT WAS CALLED FOR AS THE ASSESSEE DID N OT EARN ANY EXEMPT INCOME DURING THE RELEVANT YEAR. THE CIT(A), BATHIN DA HAS RELIED UPON THE JUDGMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS LAKHANI MARKETING INC. REPORTED IN 272 CTR 265. HOWEVER, WITH DUE RESPECT TO THE JUDGMENT OF THE HON'BLE HIGH COURT, IT IS OBSERVED THAT SECTION 14A OF THE ACT PROVIDES FOR THE DISALLOWANC E OF EXPENDITURE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF TOTA L INCOME. CBDT VIDE CIRCULAR NO. 5/2014 DATED 11.02.2014, HAS CLARIFIED THAT RULE 8D READ WITH SECTION 14A OF THE ACT PROVIDES FOR DISALLOWANCE OF THE EXPENDITURE WHERE TAXPAYER IN A PARTICULAR YEAR HAS NOT EARNED EXEMPT INCOME. IN THE CIRCULAR IT HAS BEEN PROVIDED AS UNDER:- 'CENTRAL BOARD OF DIRECT TAXES, IN EXERCISE OF ITS POWERS UNDER SECTION 119 OF THE ACT HEREBY CLARIFIES THAT RULE 8 D READ WITH SECTION 14A OF THE ACT PROVIDES FOR DISALLOWANCE OF THE EXPENDITURE EVEN WHERE TAXPAYER IN A PARTICULAR YEAR HAS NOT EA RNED ANY EXEMPT INCOME .' IT IS APPARENT THAT THE SAID CIRCULAR WAS NOT BROUG HT TO THE NOTICE OF HON'BLE HIGH COURT AND HENCE WAS NOT CONSIDERED BY THE HON'BLE HIGH COURT. THE LD. CIT (A) HAS ALLOWED THE APPEAL OF THE ASSES SEE BY ACCEPTING THE CONTENTION OF THE ASSESSEE THAT INTEREST FREE F UNDS IN THE FORM OF SHARE CAPITAL OF RS.43.74 LAKHS AND RESERVE AND SURPLUS O F RS.2300.33 LAKHS WERE AVAILABLE FOR INVESTMENT IN SHARES WORTH RS.14 71 LAKHS AND THAT NO INTEREST BEARING FUNDS WERE USED FOR INVESTMENT IN SHARES HOWEVER IT IS OBSERVED THAT THESE AMOUNTS WERE ALREADY UTILIZED B Y THE ASSESSEE IN FIXED ASSETS (RS.2180 LAKHS) INVESTMENTS OTHER THAN SHARES (RS.464 LAKHS), INVENTORIES (RS.87 LAKHS) SHORT TERM ADVANCES (RS.2 34 LAKHS) AND OTHER CURRENT ASSETS (RS.99 LAKHS) AND IN ORDER TO MEET T HE DEFICIT, THE ASSESSEE HAD TO RAISE INTEREST BEARING LOANS IN THE FORM OF LONG TERM BORROWINGS (RS.1471 LAKHS) AND SHORT TERM BORROWINGS (RS.152 L AKHS). IN THE CASE OF CIT VS TAIKISHA ENGINEERING INDIA LTD., 370 ITR 338 , THE HON'BLE DELHI HIGH COURT HAS HELD THAT CLAUSE (II) TO SUB RULE (2 ) OF RULE 8D EXPRESSLY ITA NO.76 (ASR)/2017 ASST. YEAR: 2012-13 4 PROVIDE THAT WHERE THE ASSESSEE HAS INCURRED EXPEND ITURE BY WAY OF INTEREST IN THE PREVIOUS YEAR AND THE INTEREST PAID IS NOT DIRECTLY ATTRIBUTABLE TO ANY PARTICULAR INCOME OR RECEIPT, E VEN THEN THE FORMULA PRESCRIBED UNDER RULE 8D WOULD APPLY. FURTHER, IN T HE CASE OF BHARAT BEEDI WORKS (P) LTD VS ADCIL CIT, IT WAS HELD BY TH E HON'BLE KARNATAKA HIGH COURT THAT THE BURDEN WAS UPON THE ASSESSEE TO SHOW AND PROVE THAT INTEREST TREE FUND FAR EXCEEDED THE VALUE OF INVEST MENT AND THAT IN THE PRESENT CASE, THE SAID BURDEN HAD NET BEEN DISCHARG ED SATISFACTORILY AND THEREAFTER, THE ASSESSING OFFICER HAD PROCEEDED TO APPLY THE FORMULA PROVIDED UNDER RULE 8D(2)(II) READ WITH SECTION 14A OF THE ACT. IN VIEW OF THE FOREGOING FACTS, IT IS PRAYED THAT T HE ORDER OF THE CIT(A), BATHINDA MAY KINDLY BE SET ASIDE AND THAT O F THE ASSESSING OFFICER MAY KINDLY BE RESTORED. 5. ON THE CONTRARY, THE LD. AR SUBMITTED THAT SIMILAR A ND IDENTICAL ISSUES HAVE ALREADY BEEN DECIDED BY THE ITAT, AMRITSAR B ENCH, IN ITA NO. 256 TO 260(ASR)/2016 RELEVANT TO ASST. YEARS:2008-0 9 TO 2012-13, THEREFORE, THE ORDER UNDER CHALLENGE DOES NOT REQUIRE S TO BE INTERFERED WITH. 6. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTAN CES OF THE CASE AND RIVAL SUBMISSIONS OF THE PARTIES AND ORDER PASSED BY THE AUTHORITIES BELOW. FOR THE SAKE OF CONVENIENCE AND BREV ITY, WE FEEL IT APPROPRIATE TO REPRODUCE HEREIN BELOW THE RELEVANT P ARTS OF THE ORDER PASSED BY THE LD. CIT(A). 4. THE AFORESAID DECISION OF THE VARIOUS HIGH COUR TS WERE SEEN TO BE UNANIMOUS IN HOLDING THAT WHERE IT HAS BEEN HELD TH AT INTEREST-FREE FAR EXCEEDED INVESTMENTS MADE FOR EARNING EXEMPT DIVIDE ND INCOME AND THE AO HAS FAILED TO ESTABLISH THE NEXUS BETWEEN BORROW ED FUNDS AND INVESTMENTS MADE, NO DISALLOWANCE COULD BE MADE UND ER SECTION 14A. THE HONBLE BOMBAY HIGH COURT IN THE AFORESTATED CASE A LSO CATEGORICALLY HELD THAT IF AVAILABLE FUNDS COMPRISE BOTH, INTEREST-FRE E AND OVERDRAFT/LOANS, THEN A PRESUMPTION WOULD ARISE THAT INVESTMENTS WOU LD BE OUT OF THE INTEREST-FREE FUNDS GENERATED OR AVAILABLE, IF THE INTEREST-FREE FUNDS ARE ITA NO.76 (ASR)/2017 ASST. YEAR: 2012-13 5 SUFFICIENT TO MEET THE INVESTMENTS. IN THE APPELLAN TS CASE, THE CONTENTION MADE BEFORE THE AO THAT THE INTEREST-FREE FUNDS WER E UTILISED FOR MAKING INVESTMENTS WAS NEITHER CONTESTED NOR NEGATED. THE HIGHER APPELLATE AUTHORITIES HAVE CONSISTENTLY HELD THE VIEW THAT FO R MAKING A DISALLOWANCE UNDER SECTION 14A, THERE IS A REQUIREMENT OF ESTABL ISHING A NEXUS BETWEEN THE INTEREST- BEARING FUNDS AND THE INVESTMENTS MAD E. NO EFFORT TOWARDS THIS EXERCISE IS SEEN TO HAVE BEEN MADE BY THE AO W HICH IS MANIFEST IN THE IMPUGNED ASSESSMENT ORDER. PERHAPS, THIS ISSUE WAS NOT TOUCHED UPON BY THE AO IN VIEW OF THE SELF EVIDENT FACTS OF SHARE CAPITAL AND RESERVE AND SURPLUS FAR EXCEEDING THE INVESTMENTS. THE AO IS S EEN TO HAVE STOPPED SHORT AT STATING THAT INVESTMENTS HAVE BEEN MADE T O EXEMPT INCOME GENERATING SOURCES WHICH HAVE NO DIRECT BEARING WIT H THE BUSINESS OF THE ASSESSEE. BESIDES, THE APPELLANT PROCLAIMS NOW AND AS STATED, EVEN BEFORE THE AO THAT THE TERM LOANS RAISED WERE UTILI SED ONLY FOR INVESTMENT IN THE FIXED ASSETS. IT WAS AVERRED THAT IT IS IMPL ICIT IN THE GRANT OF THE FACILITY IN RESPECT OF WHICH INTEREST HAS BEEN PAID THAT THE SAID FACILITIES ARE TO BE USED FOR SPECIFIC PURPOSES AND AS SUCH AR E SUBJECT TO STRINGENT STANDARDS OF CREDIT MONITORING BY THE RESPECTIVE BA NKS. THIS WOULD DEMONSTRATE, UNLESS PROVED TO THE CONTRARY, THAT TH E CORRESPONDING FUNDS RAISED BY THE APPELLANT WERE USED ONLY FOR THE PURP OSES FOR WHICH THEY WERE GRANTED AND THE PRESUMPTION OF DIVERSION OF FU NDS FOR ANY OTHER PURPOSE WERE NOT NOTICED BY THE AO IN THE SCRUTINY PROCEEDINGS. 5. IN ADDITION TO THE ABOVE, IT IS AN ADMITTED FACT THAT NO DIVIDEND INCOME WAS RECEIVED BY THE APPELLANT COMPANY DURING THE YEAR UNDER CONSIDERATION. THOUGH THE CBDTS CIRCULAR DATED 11 TH OF FEBRUARY, 2014 [NO. 5/2014; F.NO. 225/182/2013-ITA.II] HAS CLARIFI ED THAT RULE 8D READ WITH SECTION 14A SHALL BE APPLICABLE FOR DISALLOWAN CE OF THE EXPENDITURE EVEN WHERE TAX PAYER IN A PARTICULAR YEAR HAS NOT E ARNED ANY EXEMPT INCOME, THERE ARE MANY DECISIONS OF VARIOUS HIGH CO URTS HOLDING CONTRARY VIEW. THE JURISDICTIONAL HIGH COURT OF PUNJAB AND H ARYANA IN THE CASE OF CIT, FARIDABAD VS. LAKHANI MARKETING INC. [2014] 49 TAXMANN.COM 257, VIDE ORDER DATED 2 ND OF APRIL, 2014 HAS CATEGORICALLY HELD THAT UNLESS AND UNTIL THERE IS A RECEIPT OF EXEMPTED INCOME FOR THE CONCERNED ASSESSMENT YEARS, SECTION 14A CANNOT BE INVOKED. IN DOING SO, THE HONBLE HIGH COURT MADE A REFERENCE TO TWO EARLIER DECISIONS OF THE SA ME HIGH COURT: CIT VS. HERO CYCLES LTD [2010] 323 ITR 518 AND CIT VS. WINS OME INDUSTRIES LTD. [2009] 319 ITR 204, TO HOLD THAT SECTION 14A CANNOT BE INVOKED WHEN NO EXEMPT INCOME WAS EARNED. SUBSEQUENTLY, ON 5 TH .OF SEPTEMBER, 2014, THE HONBLE DELHI HIGH COURT FOLLOWED THE AFORESAID DEC ISION OF THE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. HOLCIM IN DIA (P.) LTD. (2015) 57 TAXMAN.COM 28. 6. IN VIEW OF THE AFORESAID, IT IS HELD THAT SINCE THE CONTENTION OF THE APPELLANT COMPANY THAT IT HAD NON-INTEREST BEARING FUNDS FAR EXCEEDING THE INVESTMENTS MADE, COULD NOT BE EITHER PROVED TO BE INCORRECT OR FALSE AND THAT THE PROBABLE DIVERSION OF INTEREST- BEARING FU NDS COULD NOT BE PROVED, THERE CANNOT BE ANY DISALLOWANCE IN TERMS OF SECTIO N 14A READ WITH RULE 8D. THE AO IS, THEREFORE, DIRECTED TO DELETE THE AD DITION OF RS.65,97,366/- AND RECOMPUTED THE PAYABLE TAX AND INTEREST. IT IS ORDERED ACCORDINGLY. ITA NO.76 (ASR)/2017 ASST. YEAR: 2012-13 6 6.1. LET US TO PERUSE THE ORDER PASSED BY THE ITAT, AMRITSA R BENCH IN THE CASE OF ASSESSEE ITSELF IN ITA NOS. 256 TO 260 (ASR)/201 6 RELEVANT TO THE ASST. YEAR 2008-09 TO 2012-13. 31. APROPOS GROUND NO.3, THE ID. PRI. CIT OBSER VED THAT THE ASSESSEE COMPANY HAD CHOSEN TO INVEST IN THE COMPANIES CLOSE LY CONNECTED WITH THE DIRECTORS; THAT THE INVESTMENTS WERE MADE TO EARN D IVIDEND INCOME; THAT THIS TRANSACTION CANNOT BE NEATLY DEMARCATED AS BEI NG ONE THAT IS NOT OUT OF LOANS RAISED AND HENCE, NOT HIT BY SECTION 14A O F THE ACT; THAT SUCH NEAT DIVISIONS HAVE NOT BEEN ESTABLISHED AND SUCH ARGUME NTS ONLY CLOUD THE FACTUM OF DIVERSION OF COMPANY FUNDS FOR EARNING EX EMPT INCOME THROUGH COMPANIES CLOSELY CONNECTED WITH THE DIRECTORS; AND THAT NO STATUTORY AUTHORITY CAN COUNTENANCE ARRANGEMENTS MADE TO DEFE AT THE PROVISIONS OF THE LAW. 32. IN THIS REGARD, THE ID. COUNSEL FOR THE A SSESSEE HAS CONTENDED THAT THE ISSUE WITH RESPECT TO DISALLOWANCE U/S 14A CANN OT BE RAISED IN THE PROCEEDINGS U/S 263 OF THE ACT. RELIANCE HAS BEEN P LACED ON CIT VS. DLF LIMITED, 350 ITR 55 (DELHI), WHERE IT HAS BEEN HEL D THAT TO MAKE A DISALLOWANCE U/S 14A, POWERS U/S 263 CAN NOT BE EXE RCISED. IT HAS FURTHER BEEN SUBMITTED THAT SINCE DURING THE RELEVANT YEARS , THE ASSESSEE DID NOT ENJOY ANY EXEMPT INCOME, ON MERITS ALSO, NO DISALLO WANCE WAS WARRANTED U/S 14A. FOR THIS PROPOSITION, RELIANCE HAS BEEN PL ACED ON THE FOLLOWING CASES LAWS: I) CIT VS. LAKHANI MARKETING INC., 272 CTR 264 (P&H) II) CIT VS. HOLCIM INDIA PVT. LTD. 272 ITR 386 (DELHI ) III) CIT VS. CORRTECH ENERGY PVT. LTD. 272 CTR 262 (GU J.) IV) CIT VS. SHIVAM MOTORS PVT. LTD., 272 CTR 277 (ALL ) V) CHEMINVEST LTD. VS. CIT-IV, 378 ITR 33 (DELHI) 33. IT HAS BEEN CONTENDED THAT SO FAR AS REGA RDS THE ASSESSMENT YEARS 2008-09 TO 2011-12, THE ASSESSMENTS FOR THE SAID YE ARS HAVE BEEN FRAMED PRIOR TO 31.03.2012, WHEREAS THE NOTICES U/S 263 OF THE ACT HAD BEEN ISSUED MUCH AFTER THE STATUTORY PERIOD OF TWO YEARS, FROM THE END OF THE PREVIOUS YEAR IN WHICH THE ASSESSMENT WAS FRAME D, I.E., IN NOV, 2015. THEREFORE, ACCORDING TO THE ASSESSEE, THE ISS UE OF DISALLOWANCE U/S 14A OF THE ACT OUGHT NOT TO HAVE BEEN RAISED BY THE PRI. CIT IN THE CONCERNED NOTICES, THE ISSUE OF DISALLOWANCE U/S 14 A HAVING NOT BEEN DISCUSSED IN THE REASSESSMENT PROCEEDINGS FOR ALL T HESE YEARS. FOR THIS, RELIANCE HAS BEEN PLACED ON CIT VS. CHEMINVEST LTD . (SUPRA) AND CIT, CHENNAI VS. ALAGENDRAN FINANCE LIMITED, 293 ITR 1 (SC) AND CIT VS. ICICI BANK LIMITED, 343 ITR 74 (BOM.). 34. CONCERNING THE ASSESSMENT YEAR 2012-13, THE STAND OF THE ASSESSEE IS THAT THE ISSUE WAS DISCUSSED IN DETAIL BY THE AO WHILE PASSING THE ASSESSMENT ORDER. AN INQUIRY LETTER DATED 18.11.201 4 (APB- 78) WAS ISSUED. THE ASSESSEE FILED REPLY DATED 17.12.2014 ( APB79 TO 97). THE AO MADE FULL APPLICATION OF MIND WHILE FRAMING THE ASS ESSMENT. ITA NO.76 (ASR)/2017 ASST. YEAR: 2012-13 7 35. THE ID. DR, ON THE OTHER HAND, HAS STRONGLY RELIED ON THE ORDER UNDER APPEALS. 36. IN THIS REGARD, THE PROPOSITION SETTLED IN DLF LIMITED (SUPRA) IS THAT THE POWERS U/S 263 OF THE ACT CANNOT BE INVOKED FOR MAKING DISALLOWANCE U/S 14A OF THE ACT. WHILE OBSERVING SO, IT WAS HELD THAT IT IS NOT MERE PREJUDICE TO THE REVENUE OR A MERE ERRONEOUS VIEW, WHICH CAN BE REVISED U/S 263 OF THE ACT AND THAT THERE SHOULD EXIST THE ADDED ELEMENT OF SUSTAINABILITY IN THE ORDER OF THE AO, WHICH CLOTHE S THE CIT (HERE, THE PRI. CIT) WITH JURISDICTION TO ISSUE NOTICE AND PROCEED TO MAKE APPROPRIATE ORDER. 37. BEFORE US, NOTHING IS AVAILABLE EITHER IN T HE IMPUGNED ORDERS, OR BY OF ANY OTHER MATERIAL ON RECORD, TO SUGGEST THAT TH E ASSESSMENT ORDERS WERE UNSUSTAINABLE IN LAW. AS OBSERVED IN DLF INDI A (SUPRA), POSSIBLY, THE AO COULD HAVE TAKEN A VIEW DIFFERENT FROM THE O NE TAKEN BY HIM, BUT HE DID NOT DO SO AND THIS WOULD NOT RENDER HIS OPIN ION AS AN UNSUSTAINABLE OPINION WARRANTING EXERCISE OF REVISI ONAL POWERS. THE UNDISPUTED STAND OF THE ASSESSEE IS THAT IT DID NOT EARN ANY EXEMPT INCOME DURING THE RELEVANT YEARS. THEREFORE ALSO, N O DISALLOWANCE U/S 14A WAS CALLED FOR. THE DECISION IN LAKHANI MARKETING INC. (SUPRA), HOLCIM INDIA PVT. LTD. (SUPRA), CORRTECH ENERGY PVT. LTD . (SUPRA) AND SHIVAM MOTORS PVT. LTD. (SUPRA) ARE TO THE SAME EFFECT. T OO, AS PER SECTION 14A(3), WHERE AN ASSESSEE CLAIMS THAT NO EXPENDITURE HAS BE EN INCURRED BY HIM IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT, THE PROVISIONS OF SECTION 14A(2) SHALL NOT APP LY, I.E., THE AO SHALL NOT DETERMINE THE AMOUNT OF EXPENDITURE INCURRED IN REL ATION TO SUCH INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. 6.2. WE HAVE PERUSED THE ORDERS PASSED BY THE LD. CIT(A) AS WELL AS ITAT, AMRITSAR BENCH AND IN OUR CONSIDERED VIEW THAT ISSU E UNDER HAND HAS ALREADY BEEN SETTLED BY THE CO-ORDINATION BE NCH OF ITAT, AMRITSAR AND EVEN OTHERWISE NEITHER ANY MATERIAL HAS B EEN BROUGHT ON RECORD AS AGAINST THE ORDER PASSED BY THE LD. CIT(A) NOR AGAINST THE JUDGMENT PASSED BY THE CO-ORDINATION BENCH OF ITAT, AM RITSAR, THEREFORE, WE DO NOT FIND ANY INFIRMITY, ILLEGALITY AND IMPROPRIETY IN THE ORDER PASSED BY THE LD. CIT(A), HENCE, THE APPEAL OF T HE REVENUE DEPARTMENT IS DISMISSED. ITA NO.76 (ASR)/2017 ASST. YEAR: 2012-13 8 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE/DEPA RTMENT STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.10.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:30.10.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER