M/S. Kehems Consultants Private Limited, Indore V. The ACIT 3(1), Indore

ITA 76/IND/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98975 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 28-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: MANOJ PHADNIS
• Keywords: Period of limitation; Proportionate interest; Question of law; Deemed dividend
• Section: 14A; 68

Judgement Text

KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 76/IND/2014 A.Y.2008-09 M/S KEHEMS CONSULTANTS PVT. LTD, INDORE ::: APPELLANT VS ASSTT.COMMR. OF INCOME TAX 3(1) INDORE ::: RESPONDENT APPELLANT BY SHRI MANOJ PHADNIS RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 18.8.2015 DATE OF PRONOUNCEMENT 1 5 .9.2015 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LEARNED CIT(A)-I, INDORE, DATED 24.1 0.2013. KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 2 2. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 29.9.2008 DECLARING TOTAL INCOME AT RS.79,96,900/-. TH E ASSESSEE IS ENGAGED IN THE BUSINESS OF ENGINEERING SOLUTIONS. GROUND NO. 1 IN THE ASSESSEES APPEAL IS AGAI NST SUSTAINING THE DISALLOWANCE OF RS.27,39,500/- ON ACCOUN T OF CESSATION OF LIABILITIES U/S 41(1) OF THE ACT. THI S AMOUNT OF RS.27,39,500/- CONSISTS OF LIABILITIES ONE OF RS.8.67.500/- FROM M/S SHEEBA HOTELS LTD. AS ADVANCE AGAINST SUPPLY OF GOODS AND RS.18,72,000/- DUE TO M/S ENTROPE S.A. FRANCE TOWARDS ENGINEERING SERVICES (DES IGN & DRAWINGS). IT IS CLAIMED THAT DUE TO SOME PROBLEM, THIS PROJECT COULD NOT BE STARTED. THE AMOUNT TO BE PAID TO SHEEBA HOTELS CONTINUED TO BE OUTSTANDING AS ADVANCE RECEIVED FROM CUSTOMER AND THE SAME WILL BE ADJUSTED AGAINST THE FUTURE SUPPLIES AS SOON AS THE MATTER IS SE TTLED. THE SECOND AMOUNT OF RS. 18,72,000/- DUE TOWARDS M/S ENTROPIE SA FRANCE TOWARDS ENGINEERING SERVICES (DESI GN & KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 3 DRAWINGS) COULD NOT BE RETURNED FOR WANT OF PERMISSI ON FROM RESERVE BANK OF INDIA. THIS PAYMENT SHALL BE MADE IN DUE COURSE AS WELL AS WHEN THE PERMISSION IS RECEIVED FROM RESERVE BANK OF INDIA. 3. WHILE PLEADING ON BEHALF OF THE ASSESSEE, THE LEARNE D COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ADDITION IS BASED ON THE ASSUMPTION THAT CREDITS APPEARING FOR MORE THAN THREE YEARS ARE TIME BARRED AND, THEREFORE, CEASED TO BE LIABILITY. SUCH PRESUMPTION IS CONTRARY TO THE WE LL SETTLED LAW, THEREFORE, THE LEARNED CIT(A) WAS NOT J USTIFIED IN SUSTAINING THE SAME. HE ALSO SUBMITTED THAT THE ADDIT ION HAS BEEN MADE TOWARDS CREDITS WHICH ARE NOT RELEVANT FOR THE YEAR UNDER CONSIDERATION. THEREFORE, IT CANNOT FO RM PART OF THE TOTAL INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. SIMILAR ADDITION IN THE SUCCEEDING YEAR I.E. ASSESSMENT YEAR 2009-10 HAS BEEN DELETED BY THE LEARNE D CIT(A). KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 4 4. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION OF THE HON'BLE SUPREME COURT OF INDIA IN TH E CASE OF CIT VS. SUGAULI SUGAR WORKS (P) LTD. (1999) 102 TAXMANN.713 (SC) WHEREIN THE HON'BLE SUPREME COURT H AS HELD THAT SECTION 41 CONTEMPLATES THAT OBTAINING BY THE ASSESSEE OF AN AMOUNT EITHER IN CASH OR IN ANY OTHER MANNER, WHATSOEVER, OR A BENEFIT BY WAY OF REMISSION O R CESSATION AND IT SHOULD BE OF A PARTICULAR AMOUNT OBTAINE D BY HIM. THUS, THE OBTAINING BY THE ASSESSEE OF A BENEF IT BY VIRTUE OF REMISSION OR CESSATION IS SINE QUA NON FOR THE APPLICATION OF THIS SECTION. THE HON'BLE SUPREME COUR T EVEN HELD THAT THE MERE FACT THAT THE ASSESSEE HAS MADE ENTRY OF TRANSFER IN HIS ACCOUNTS UNILATERALLY WILL NOT ENABLE THE DEPARTMENT TO SAY THAT SECTION 41 WOULD APPLY AND T HE AMOUNT SHOULD BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE. HE ALSO RELIED UPON THE DECISION OF THE HO N'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SHRI VARDHMAN KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 5 OVERSEAS LIMITED REPORTED IN 16 TAXMANN.COM 350(DELHI ). THERE ALSO HON'BLE HIGH COURT HAS HELD THAT THE ASSESSE E HAS NOT UNILATERALLY WRITTEN BANK THE ACCOUNTS OF SUNDRY CREDITORS IN ITS PROFIT AND LOSS ACCOUNT, THE TRIBUNAL WAS JUSTIFIED IN DELETING THE AMOUNT OF ADDITION MADE U/S 41(1) OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO RELIED UPON THE DECISION OF THE HON'BLE GUJARAT HIGH COURT I N THE CASE OF CIT VS. PURIDEVI MAHENDRAKUMAR CHAUDHARY; 41 TAXMANN.COM 329(GUJARAT) WHEREIN THE HON'BLE HIGH COUR T HAS HELD THAT AS THE ADDITION WAS MADE SOLELY ON THE BAS IS THAT THE SAID LIABILITY IS MORE THAN THREE YEARS, IT CAN NOT BE SAID THAT THE TRIBUNAL HAS COMMITTED ANY ERROR IN DELETI NG THE ADDITION MADE UNDER SECTION 41(1). NO QUESTION OF LAW MUCH LESS ANY SUBSTANTIAL QUESTION OF LAW ARISES IN THE INSTANT APPEAL. HENCE, THE APPEAL DESERVED TO BE DISMISS ED. HON'BLE GUJARAT HIGH COURT RELIED UPON THE DECISION OF THE KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 6 HON'BLE SUPREME COURT IN THE CASE OF CIT VS. SUGAULI SUGAR WORKS (P) LTD. (SUPRA). 5. ON THE OTHER HAND, THE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THA T SINCE THE LIABILITIES WERE QUITE OLD, THEREFORE, THE ADDITION WAS JUSTIFIED. 6. WE HAVE HEARD BOTH THE SIDES. THE ASSESSEE HAS RECEIVED PAYMENT OF RS. 8,67,500/- FROM M/S SHEEBA HOTELS LTD. AS ADVANCE AGAINST SUPPLY OF GOODS BUT DUE T O SOME PROBLEM, THE ASSESSEE COULD NOT DO SO AS THE PR OJECT COULD NOT BE STARTED. THE ASSESSEE CONTINUED TO SHOW THE LIABILITY IN ITS BOOKS OF ACCOUNTS AS ADVANCE RECEIVED FROM THE CUSTOMERS. SIMILARLY, THE AMOUNT OF RS.18,72,000/ - WAS ALSO OUTSTANDING IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE FROM M/S ENTROPIE SA FRANCE AND THE ASSESSEE COULD NOT RETURN THE SAME FOR WANT OF PERMISSION FROM RESERVE BANK OF INDIA. FURTHER, THE ASSESSEE CONTINUED TO KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 7 SHOW THIS LIABILITY IN ITS BOOKS OF ACCOUNTS AS PAYAB LE. CONSIDERING THIS FACTUAL ASPECT, WE HOLD THAT THE LEARN ED CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION WH ICH WAS BASED ON PRESUMPTION THAT THE LIABILITY HAS CEASED T O EXIST WHILE THE ASSESSEE CONTINUED TO SHOW THIS LIABI LITY IN ITS BOOKS OF ACCOUNTS. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. SUGAULI SUGAR WORKS (P) LTD.(SUPRA) HE LD AS UNDER :- SECTION 41 CONTEMPLATES THAT THE OBTAINING BY THE ASSESSEE OF AN AMOUNT EITHER IN CASH OR IN ANY OTHER MANNER WHATSOEVER OR A BENEFIT BY WAY OF REMISSION OR CESSATION AND IT SHOULD BE OF A PARTICULAR AMOUNT OBTAINED BY HIM. THUS, THE OBTAINING BY THE ASSESSEE OF A BENEFIT BY VIRTUE OF REMISSION OR CESSATION IS SINE QUA NON FOR THE APPLICATION OF THIS SECTION. THE MERE FACT THAT THE ASSESS HAS MADE AN ENTRY OF TRANSFER IN HIS KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 8 ACCOUNTS UNILATERALLY WILL NOT ENABLE THE DEPART- MENT TO SAY THAT SECTION 41 WOULD APPLY AND THE AMOUNT SHOULD BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE. JUST BECAUSE AN ASSESSEE MAKES AN ENTRY IN HIS BOOKS OF ACCOUNTS UNILATERALLY, HE CANNOT GET RID O F HIS LIABILITY. THE QUESTION WHETHER THE LIABILITY I S ACTUALLY BARRED BY LIMITATION IS NOT A MATTER WHICH CAN BE DECIDED BY CONSIDERING THE ASSESSEE'S CASE ALONE BUT IT IS A MATTER WHICH HAS TO BE DECIDED ONLY IF THE CREDITOR IS BEFORE THE CONCERNED AUTHOR ITY. IN THE ABSENCE OF THE CREDITOR, IT IS NOT POSSIBLE FOR THE AUTHORITY TO COME TO A CONCLUSION THAT THE DEBT IS BARRED AND HAS BECOME UNENFORCEABLE. THERE MAY BE CIRCUMSTANCES WHICH MAY ENABLE THE CREDITOR TO COME WITH A PROCEEDING FOR ENFORCEMENT OF THE DEBT EVEN AFTER EXPIRY OF THE NORMAL PERIOD OF KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 9 LIMITATION AS PROVIDED IN THE LIMITATION ACT . THE PRINCIPLE THAT EXPIRY OF PERIOD OF LIMITATION PRESCRIBED UNDER THE LIMITATION ACT CANNOT EXGINGUISH THE DEBT BUT IT WILL ONLY PREVENT THE CREDITOR FROM ENFORCING THE DEBT IS WELL-SETTLED. MERE ENTRY IN THE BOOKS OF ACCOUNTS OF THE DEBTOR MADE UNILATERALLY WITHOUT ANY ACT ON THE PART OF TH E CREDITOR WOULD NOT ENABLE THE DEBTOR TO SAY THAT TH E LIABILITY HAD COME TO AN END. APART FROM THAT THAT WOULD NOT BY ITSELF CONFER ANY BENEFIT ON THE DEBTO R AS CONTEMPLATED BY THE SECTION. THEREFORE, THE HIGH COURT WAS RIGHT IN HOLDING THAT THE ASSESSEES UNILATERAL ENTRY IN THE ACCOUNTS TRANSFERRING THE AMOUNT TO THE CAPITAL RESERVE ACCOUNT WOULD NOT BRING THE MATTER WITHIN THE SCOPE OF SECTION 41. KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 10 ON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SHRI VARDHMAN OVERSEAS LIMITED (SUPRA) HELD AS UNDER :- SECTION 41(1) READ WITH SECTION 68, OF THE INCOME TAX ACT, 1961 REMISSION OR CESSATION OF TRADING LIABILITY ASSESSMENT YEAR 2002-03 ASSESSEE WAS A COMPANY ENGAGED IN MANUFACTURE OF RICE FROM PADDY IT WAS ALSO SELLING RICE AFTER PURCHASING SAME FROM LOCAL MARKET IN COURSE OF ASSESSMENT ASSESSING OFFICER WANTED TO VERIFY SUNDRY CREDITORS SHOWN IN BOOKS OF ACCOUNTS HE, THEREFORE, CALLED UPON ASSESSEE TO SUBMIT CONFIRMATION LETTERS FROM SUNDRY CREDITORS ON FAILURE OF ASSESSEE TO SUBMIT CONFIRMATION LETTERS ASSESSING OFFICER ADDED AMOUNT IN QUESTION TO ASSESSEES INCOME UNDER SECTION 68 ON KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 11 APPEAL, COMMISSIONER (APPEALS) HELD THAT LIABILITIES/CREDITS HAD CEASED TO EXIST AND, THEREFORE, ADDITION MADE BY ASSESSING OFFICER WAS JUSTIFIED BUT HE CONFIRMED SAME UNDER SECTION 41(1) TRIBUNAL HELD THAT APPLICABILITY OF SECTION 68 WAS RULED OUT SINCE NO FRESH AMOUNTS WERE CREDITED IN ACCOUNTS OF CREDITORS DURING RELEVANT ACCOUNTING YEAR TRIBUNAL FURTHER FOUND THAT AMOUNTS PAYABLE TO SUNDRY CREDITORS WERE NOT CREDITED TO ASSESSEES PROFIT AND LOSS ACCOUNT FOR YEAR AND THOSE AMOUNTS WERE STILL SHOWN AS OUTSTANDING AT END OF RELEVANT YEAR. TRIBUNAL THEREFORE HELD THAT PROVISIONS OF SECTION 41(1) WERE NOT ATTRACTED TO CASE WHETHER IN VIEW OF FACT THAT ASSESSEE HAD NOT UNILATERALLY WRITTEN BACK ACCOUNTS OF SUNDRY CREDITORS IN KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 12 ITS PROFIT AND LOSS ACCOUNT, TRIBUNAL WAS JUSTIFIED IN DELETING IMPUGNED ADDITION MADE UNDER SECTION 41(1) HELD, YES (IN FAVOUR OF ASSESSEE) HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. PU RIDEVI MAHENDRAKUMAR CHAUDHARY (SUPRA) HELD AS UNDER :- AS THE ADDITION WAS MADE SOLELY ON THE BASIS THAT THE SAID LIABILITY IS MORE THAN THREE YEARS, IT CANNOT BE SAID THAT THE TRIBUNAL HAS COMMITTED ANY ERROR IN DELETING THE ADDITION MADE UNDER SECTION 41(1). NO QUESTION OF LAW MUCH LESS ANY SUBSTANTIAL QUESTION OF LAW ARISES IN THE INSTANT APPEAL. HENCE, THE APPEAL DESERVED TO BE DISMISSED. 7. CONSIDERING THE FACTUAL ASPECT OF THE ASSESSEES CASE AND THE RATIO DECIDED BY THE HON'BLE COURTS, WE SET AS IDE KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 13 THE ORDERS OF THE AUTHORITIES BELOW AND ALLOW THIS GRO UND OF APPEAL OF THE ASSESSEE. 8. GROUND NO. 2 OF THE ASSESSEES APPEAL IS AGAINST SUSTAINING THE ADDITION OF RS.1,92,516/- ON ACCOUNT OF DEEMED DIVIDEND VIS--VIS KEHEMS ENGINEERING PRIVATE LIMITED. 9. WHILE PLEADING ON BEHALF OF THE ASSESSEE, THE LEARNE D COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEARNED CI T(A) HAS WRONGLY CONFIRMED THE ADDITION AS THE ASSESSING OFFICER FAILED TO CONSIDER THE FACT THAT THE AMOUNT REC EIVED BY THE ASSESSEE COMPANY IS TOWARDS ROYALTY WHICH HAS BEEN ACCOUNTED FOR ON THE LAST DATE OF ACCOUNTING YEAR. THE LEARNED CIT(A) FAILED TO CONSIDER THE FACT THAT ROYALTY ACCRUES ON DAY TO DAY BASIS. 10. WE HAVE HEARD BOTH THE SIDES. KEHEMS ENGINEERING PRIVATE LIMITED WAS HOLDING 50% SHARES OF THE ASSESSEE KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 14 COMPANY. THE AMOUNT RECEIVABLE WAS AGAINST ROYALTY OF RS.6,30,609/- DEBIT BALANCE IS RS.4,25,098/-. THUS, T HE SUM WAS DUE AND RECEIVABLE FROM KEHEMS ENGINEERING PRIVATE LIMITED AND IT WAS NOT AN AMOUNT OF LOAN OR ADVANCE GIVEN TO IT. CONSIDERING THIS ASPECT OF TRANSACT ION THAT THE AMOUNT RECEIVABLE WAS A ROYALTY AND NOT A LOAN OR ADVANCE, THE REVENUE WAS NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT FOR DEEME D DIVIDEND. 11. GROUND NO. 3 WAS NOT PRESSED DURING THE APPELLATE PROCEEDINGS. THE SAME IS THEREFORE DISMISSED FOR NON - PROSECUTION. 12. IN GROUND NO. 4 THE ISSUE RAISED IS ABOUT SUSTAINI NG THE ADDITION OF RS.10,06,315/- ON ACCOUNT OF DEEMED DIVIDEND VIS--VIS MANASOM ENGINEERS PRIVATE LIMITED. KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 15 13. WHILE PLEADING ON BEHALF OF THE ASSESSEE, THE LEARN ED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEARNED CI T(A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION. IT IS S UBMITTED THAT IN A FAMILY SETTLEMENT, THE ASSESSEE HAS GIVEN UP AL L ITS RIGHT TO THE VOTING POWER IN MANASOM ENGINEERS PRIVAT E LIMITED, THEREFORE, THE LOAN RECEIVED FROM THE COMPAN Y IS NOT COVERED UNDER THE PROVISIONS OF SECTION 2(22) OF THE ACT. IT WAS CLAIMED THAT THERE WAS NO VOTING RIGHT W.E .F. 1.4.2000. HE ALSO SUBMITTED THAT THE AMOUNT RECEIVED WAS INTER-CORPORATE DEPOSIT. 14. ON THE OTHER HAND, THE LD. DR RELIED UPON THE OR DERS OF THE AUTHORITIES BELOW. 15. WE HAVE HEARD BOTH THE SIDES. THE ASSESSEE WAS HOLDING 95% SHARES OF MANASOM ENGINEERS PRIVATE LIMITED . THE ASSESSEE HAS RECEIVED LOANS AND ADVANCES FROM MANASOM ENGINEERS PRIVATE LIMITED, DETAILS OF WHICH ARE AS UNDER :- KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 16 DATE PARTICULARS CREDIT 1.5.2010 DENA BANK 300000/ - 14.5.2010 DENA BANK 1.6.2007 DENA BANK 300000/ - 31.3.2008 SUREKHA D. KEMKAR 600000/ - 16. FROM THE ABOVE IT IS CLEAR THAT MANASOM ENGINEERS PRIVATE LIMITED HAS GIVEN MONEY TO THE ASSESSEE AS LOAN OR ADVANCE AND THE ASSESSEE IS HOLDING 95% SHARES OF MANASOM ENGINEERS PRIVATE LIMITED. MANASOM ENGINEERS PRIVATE LIMITED WAS NOT A PUBLIC LIMITED COMPANY. THE ASSESSEE IS HOLDING MORE THAN 10% SHARES. MANASOM ENGINEERS PRIVATE LIMITED HAS GIVEN LOAN AND ADVANCES TO THE ASSESSEE WHO IS A MAJORITY SHARE HOLDER OF THAT COMPANY. THE CLAIM OF FAMILY SETTLEMENT AND NOT HAVING VOTING POWER ON ACCOUNT OF SUCH SETTLEMENT ARE NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. IT IS ONLY AN O RAL KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 17 CLAIM NOT HAVING ANYTHING TO ITS SUPPORT. THEREFORE, I N OUR CONSIDERED VIEW, THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT ARE CLEARLY ATTRACTED. WE, THEREFORE, CONFIRM THE ORDE RS OF THE AUTHORITIES BELOW ON THIS ISSUE. 17. IN GROUND NO. 5 THE ISSUE RAISED IS ABOUT SUSTAINI NG THE DISALLOWANCE OF RS.2,62,153/- ON ACCOUNT OF DISALLOWANCE U/S 14A OF THE ACT. 18. WE HAVE HEARD BOTH THE SIDES. THIS IS THE ASSESSME NT YEAR 2008-09 WHERE THE PROVISIONS OF RULE 8D ARE APPLICABLE. THE LEARNED CIT(A) HAS CONFIRMED THE ADDITI ON BY HOLDING AS UNDER :- 13. LAST GROUND IS AGAINST DISALLOWANCE OF RS.2,62,153/- U/S 14A OF THE INCOME TAX ACT. INVESTMENT MADE BY APPELLANT IS TO THE TUNE OF RS. 6,48,20,350/-. THE A.O. HAS CALCULATED SUCH DISALLOWANCE AS PER FORMULA GIVEN UNDER KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 18 RULE 8D. THE APPELLANT HAS NOT ASKED FOR DELETION OF SUCH ADDITION BUT HAVE ASKED FOR REDUCTION OF THIS ADDITION FROM RS.2,62,153/- TO RS.86,437/-. THE APPELLANT IS TRYING TO SUGGEST THAT DISALLOWANCE SHOULD ONLY BEMADE FOR PROPORTIONATE INTEREST ON THE AMOUNT OF INVESTMENT MADE IN THIS YEAR ALONE WHICH IS RS.1.62 CRORE BUT AS PER RULE 3D, AVERAGE OF INVESTMENT IS TO BE TAKEN WHICH IS AVERAGE OF INVESTMENT OF RS.4.86 CRORE IN BEGINNING OF THE YEAR AND RS.6.48 CRORE IN THE END OF THE YEAR. AS A RESULT ADDITION U/S 14A OF RS.2,62,153/- MADE BY A.O. IS HEREBY CONFIRMED. 19. AFTER HEARING BOTH THE SIDES, WE FIND THAT THE ASS ESSEE HAS NEVER ASKED TO DELETE THE WHOLE ADDITION BUT TO RE DUCE THE ADDITION. FROM RECORD WE FIND THAT THE ASSESSING OFFICER KEHEMS CONSULTANTS P.LTD. ITANO. 76/IND/2014 19 HAS APPLIED RULE 8D ON THE AVERAGE INVESTMENT OF RS.4.8 6 CRORES AT THE BEGINNING OF THE YEAR AND RS.6.48 CRORES AT THE END OF THE YEAR. THUS, THE RULE 8D HAS BEEN APPLI ED PROPERLY. THEREFORE, WE FIND NO MERIT IN THIS GROUN D OF THE ASSESSEE. 19. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN OPEN COURT ON 15 TH SEPTEMBER, 2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 15 TH SEPTEMBER, 2015 DN/-