Anamica Financial Services Pvt. Ltd., New Delhi V. DCIT, Circle- 2(2), New Delhi

ITA 8203/DEL/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8531 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 26-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M BARANESL SENIOR
• Keywords: Opportunity of being heard; Earning of tax free income; Rule 8D
• Section: 14A; 13; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI (THROUGH VIRTUAL COURT HEARING) BEFORE SH. R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.8202/DEL/2018 ASSESSMENT YEAR: 2012-13 ANAMICA PORTFOLIO PVT. LTD. 206-207, ANSAL SATYAM RDC, RAJNAGAR GHAZIABAD UP 201001 VS. DCIT CIRCLE 2 (2) NEW DELHI (APPELLANT) (RESPONDENT) ITA NO.8203/DEL/2018 ASSESSMENT YEAR: 2013-14 ANAMICA FINANCIAL SERVICES PVT. LTD. 206-207, ANSAL SATYAM RDC, RAJNAGAR GHAZIABAD UP 201001 VS. DCIT CIRCLE 2 (2) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. RAJEEV KHANDELWAL, CA RESPONDENT BY SH. M. BARANESL, SENIOR DR DATE OF HEARING: 02/07/2020 DATE OF PRONOUNCEMENT: 14/07/2020 PAGE | 2 ORDER PER R.K PANDA, AM: THE ABOVE TWO APPEALS FILED BY THE RESPECTIVE ASSE SSEES ARE DIRECTED AGAINST THE SEPARATE ORDERS OF THE CIT(A) 1, NEW DELHI RELATING TO A.Y. 2013-14. 2. SINCE IDENTICAL ISSUES ARE INVOLVED IN BOTH THES E APPEALS, THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 8202/DEL/2018 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COMPANY ENGAGED IN VARIOUS ACTIVITIES RELATING TO T HE NBFC COMPANY, INVESTMENT ACTIVITY AND ADVISORY / CONSULT ANCY SERVICES. 4. IT FILED ITS RETURN OF INCOME ON 27.09.2013 DECL ARING TOTAL INCOME OF RS.93,19,810/-. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSEE HAS EARN ED DIVIDEND INCOME OF RS.17,54,046/- WHICH HAS BEEN CLAIMED AS EXEMPT U/S. 10 (34) OF THE IT ACT. HE OBSERVED FROM THE BALANC E SHEET THAT THE VALUE OF INVESTMENT AS ON THE FIRST DAY OF THE YEAR WAS SHOWN AT RS. 3,08,76,900/- AND AT THE CLOSE OF THE YEAR IT W AS SHOWN AT RS. 15,06,70,375/-. HE, THEREFORE, ASKED THE ASSESS EE TO EXPLAIN PAGE | 3 AS TO WHY DISALLOWANCE U/S. 14A READ WITH RULE 8D O F THE IT RULES 1962 SHOULD NOT BE MADE. IT WAS EXPLAINED BY THE A SSESSEE THAT DISALLOWANCE OF INTEREST U/S. 4 A IS NOT APPLICABLE ON THE ASSESSEE COMPANY BECAUSE THE INTEREST RECEIVED IS MORE THAN INTEREST PAID DURING THE YEAR. THEREFORE, SUB RULE 2 OF RULE 8 D IS NOT APPLICABLE TO THE ASSESSEE COMPANY. FURTHER, THE A SSESSEE COMPANY HAS SUOMOTO DISALLOWED RS.86,351/- TOWARDS ADMINISTRATIVE EXPENSES. 5. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLA NATION GIVEN BY THE ASSESSEE. RELYING ON CBDT CIRCULAR NO .05/2014 AND THE PROVISIONS OF SECTION 14 A READ WITH RULE 8D OF THE I. T. RULES, 1962, THE AO DETERMINED THE DISALLOWANCE AT RS. 12, 35,075/-. AFTER CONSIDERING THE SUOMOTO DISALLOWANCE MADE BY THE ASSESSEE AT RS. 86,351/- THE AO MADE DISALLOWANCE OF RS. 11, 48,724/-. 6. IN APPEAL THE LD. CIT(A) UPHELD THE DISALLOWANCE MADE BY THE AO. 7. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT ORDER OF LOWER AUTHORITY IS BAD IN LAW AND IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND TOTAL ADDITION AND TAX ON LTCG IS UNSUSTAINABLE. PAGE | 4 2. THAT LD. CIT(A) ERRED IN SUSTAINING THE DISALLOWANC E OF RS.11,48,724/- MADE U/S. 14A, WITHOUT APPRECIATI NG THE FACT THAT THE SAME IS WITHOUT COMPLYING WITH TH E MANDATORY CONDITIONS OF SAID PROVISION, (A) WITHOUT RECORDING SATISFACTION ABOUT INCURRING OF EXPENDITURE RELATING TO EXEMPT INCOME WITH REGARD T O ACCOUNTS. (B) WITHOUT EVEN CONSIDERING THE DISALLOWANCE MADE BY ASSESSEE AND DEMONSTRATING SAME AS WRONG ETC. (3) THAT LD. CIT(A) FURTHER ERRED IN NOT CONSIDERIN G THE FACT THAT ASSESSEE IS HAVING MORE INTEREST FREE FUN DS THAN THE INVESTMENT UNDER DIVIDEND BEARING SECURITIES. (4) THAT LD. CIT(A) GROSSLY ERRED IN NOT EVEN ADDR ESSING THE ISSUE OF WRONGLY TAXING LTCG RS. 70,99,681/- ON STT PAID SHARES WHICH IS EXEMPT U/S. 10 (38) OF THE ACT . 8. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO TH E COPY OF THE ASSESSMENT ORDER SUBMITTED THAT THE AO HAS NOT RECORDED ANY SATISFACTION HAVING REGARDS TO THE ACCOUNTS OF THE ASSESSEE AS TO WHY THE CLAIM OF DISALLOWANCE MADE BY THE ASSESSEE U/S. 14 A IS NOT CORRECT, WHICH IS A PRE-REQUISITE FOR MAKING AN Y DISALLOWANCE U/S. 14 A OF THE ACT. 9. REFERRING TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF MAXOPP INVESTMENT LTD. VS. CIT REPORTED IN 402 ITR 640 AND VARIOUS OTHER DECISIONS HE SUBMITTED THAT I N ABSENCE OF PAGE | 5 RECORDING OF SATISFACTION BY THE AO AS TO WHY THE C LAIM OF DISALLOWANCE MADE BY THE ASSESSEE U/S. 14A IS NOT C ORRECT, NO DISALLOWANCE CAN BE MADE U/S. 14A. 10. HE ALSO RELIED ON THE FOLLOWING DECISIONS :- 1. VEDANTA LTD. [2019] 261 TAXMAN 179 (DEL) 2. H. T MEDIA LD. [ 2018] 399 ITR 576 (DEL) 3. U. K. PAINTS ( INDIA) (P) LTD. [ 2017] 392 ITR 552 (DEL) 11. WITHOUT PREJUDICE TO THE ABOVE THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO HAS DETERMINED THE D ISALLOWANCE U/S.14 A READ WITH RULE 8 D OF THE IT RULES 1962 AT RS. 12,35,075/- WHICH IS AS UNDER :- PARTICULARS AMOUNT ( RS.) RULE 8 D (2) (I) - EXPENSES DIRECTLY ATTRIBUTABLE NIL RULE 8 D (2) (II) INTEREST EXPENSES 8,12,70 7 RULE 8 D (2) (III) EXPENSES INDIRECTLY ATTRIBUTA BLE 4,22,368 TOTAL 12,35,075 12. HE SUBMITTED THAT FROM THE ABOVE IT IS CLEAR TH AT THE AO HAS NOT MADE ANY DISALLOWANCE UNDER RULE 8D (2) (I) ON ACCOUNT OF EXPENSES DIRECTLY ATTRIBUTABLE. SO FAR AS THE DISAL LOWANCE OF INTEREST EXPENSES UNDER RULE 8 D (2) (II) IS CONCER NED, THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO PAGE- 5 OF TH E PAPER BOOK WHICH IS BALANCE SHEET OF THE ASSESSEE COMPANY AS O N 31.03.2013, SUBMITTED THAT THE INTEREST FREE FUNDS I.E. SHARE PAGE | 6 HOLDER FUNDS ARE MORE THAN ENOUGH TO COVER THE INVE STMENT WHICH IS VERIFIABLE FROM THE FINANCIAL DETAILS. PARTICULARS AS AT 31.03.2012 (RS.) AS AT 31.03.2013 SHARE HOLDERS FUNDS 8,80,43,752 15,05,77,070 INTEREST BEARING FUNDS NIL NIL INVESTMENTS 3,08,76,900 13,80,70,375 13. REFERRING TO THE DECISION OF HONBLE BOMBAY HIG H COURT IN THE CASE OF HDFC BANK LIMITED REPORTED IN 366 ITR 5 05 AND THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F RELIANCE INDUSTRIES LIMITED REPORTED IN 410 ITR 466 HE SUBMI TTED THAT WHEN THE INTEREST FREE FUNDS ARE MORE THAN THE INVE STMENTS MADE, THE DIVIDEND INCOME OF WHICH IS EXEMPT FROM T AX, NO DISALLOWANCE OF INTEREST EXPENSES CAN BE MADE. 14. SO FAR AS RULE 8 D (2) (III) IS CONCERNED THE L D. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE DIVIDEND RECEIVED OF RS. 17,54,046/- THE DETAILS OF WHICH AR E AS UNDER :- SR. NO. PARTICULARS AMOUNT (RS.) 1. RELIANCE MUTUAL FUNDS 17,48,611 2. STATE BANK OF INDIA 3,500 3. RELIANCE COMMUNICATION LIMITED 1,875 4. JSW 60 TOTAL 17,54,046/- PAGE | 7 15. REFERRING TO THE DECISION OF THE DELHI (SPECIA L BENCH) OF THE TRIBUNAL IN THE CASE OF VIREET INVESTMENT PRIVATE L IMITED REPORTED IN 165 ITD 27, HE SUBMITTED THAT ONLY THOSE INVESTM ENTS CAN BE CONSIDERED FOR COMPUTING THE AVERAGE VALUE OF INVES TMENT THAT HAVE YIELDED EXEMPT INCOME DURING THE YEAR UNDER RE FERENCE. THEREFORE, THE AO SHOULD HAVE CONSIDERED THE OPENIN G AND CLOSING BALANCE OF THE INVESTMENT OF ONLY THOSE EQU ITY SHARES AND FUNDS THAT HAVE EARNED DIVIDEND INCOME. HE SUBMITTE D THAT APPLYING THE ABOVE PRINCIPLE THE ASSESSEE HAS COMPU TED THE SUO- MOTO DISALLOWANCE OF RS. 86,351/- U/S. 14 A OF THE IT ACT. 16. REFERRING TO THE DETAILS OF EXPENSES OTHER THAN INTEREST EXPENDITURE HE SUBMITTED THAT SUCH EXPENSES COMES T O RS.7,57,100/-. HE SUBMITTED THAT IF THE EXPENSES I NCURRED ON ACCOUNT OF INCREASE IN AUTHORIZED CAPITAL, STAMP DU TY AND GRATUITY EXPENSES AMOUNTING TO RS.2,93,206/- ARE DE DUCTED THE TOTAL EXPENSES INCURRED BY THE ASSESSEE COMPANY COM ES TO RS.4,63,894/- AGAINST WHICH THE ASSESSEE HAS SUO-MO TO DISALLOWED AN AMOUNT OF RS. 86,351/- WHICH IS 18.61 % OF THE TOTAL ADMINISTRATIVE EXPENSES. THEREFORE, NO FURTHE R DISALLOWANCE IS WARRANTED AND THE DISALLOWANCE MADE BY THE AO UN DER RULE 8 D (2) (III) SHOULD BE DELETED. 17. THE DR ON THE OTHER HAND STRONGLY SUPPORTED THE ORDERS OF THE AO AND CIT(A). REFERRING TO PARA-3.3 OF THE ASS ESSMENT ORDER HE SUBMITTED THAT THE AO HAS CONSIDERED THE VARIOUS DECISIONS AND HAS HELD THAT EXPENSES IN RELATION TO THE EXEMP T INCOME HAVE PAGE | 8 TO BE DISALLOWED IRRESPECTIVE OF THE FACT THAT THEY ARE DIRECT OR INDIRECT, FIXED OR VARIABLE, MANAGERIAL OR FINANCIA L IN ACCORDANCE WITH THE LAW. 18. REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF INDIA BULLS HOUSING FINANCE SERVICES LIMITE D VS. DCIT REPORTED IN 395 ITR 232 HE SUBMITTED THAT THE HONB LE HIGH COURT IN THE SAID DECISION HAS HELD THAT THE FACT T HAT THE AO DID NOT EXPRESSLY RECORD HIS DISSATISFACTION WITH THE A SESSEES WORKING DOES NOT MEAN THAT HE CANNOT MAKE THE DISALLOWANCE. THE AO NEED NOT PAY LIP SERVICE AND FORMALLY RECORD DISSAT ISFACTION. IT IS SUFFICIENT IF THE ORDER SHOWS DUE APPLICATION OF MI ND TO ALL ASPECTS. HE SUBMITTED THAT SIMILAR VIEW HAS BEEN TA KEN BY HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE O F PUNJAB TRACTORS LIMITED VS. CIT REPORTED IN 246 TAXMANN 31 (393 ITR 223). 19. THE LD. COUNSEL FOR THE ASSESSEE IN HIS REJOIN DER SUBMITTED THAT THE DECISION IN THE CASE OF INDIA BU LLS FINANCIAL SERVICES (SUPRA) WAS RENDERED ON 29.11.2016 WHEREAS THE DECISION IN THE CASE OF PUNJAB TRACTORS LIMITED WAS RENDERED IN THE YEAR 2017. HOWEVER, THE DECISION OF HONBLE AP EX COURT IN THE CASE OF MAXOPP INVESTMENT LIMITED (SUPRA) WAS P RONOUNCED IN THE YEAR 2018, THEREFORE, THE HONBLE COURTS HAD NO BENEFIT OF THE DECISION OF HONBLE SUPREME COURT AND, THEREFOR E, THE DECISIONS RELIED ON BY THE LD. DR CANNOT BE ACCEPTE D. PAGE | 9 20. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASS ESSEE IN THE INSTANT CASE HAS EARNED DIVIDEND INCOME OF RS. 17,5 4,046/- AND MADE SUO-MOTO DISALLOWANCE OF RS.86,351/- U/S. 14 A OF THE IT ACT IN THE COMPUTATION OF THE TOTAL INCOME FILED AL ONGWITH THE RETURN OF INCOME. WE FIND THE AO COMPUTED THE DISA LLOWANCE U/S. 14A R.W. RULE 8 D AT RS. 12,35,075/-. AFTER D EDUCTING THE SUO-MOTO DISALLOWANCE OF RS. 86,351/- THE AO MADE A DDITION OF RS. 11,48,724/- TO THE TOTAL INCOME OF THE ASSESSEE WHICH HAS BEEN UPHELD BY THE CIT(A). IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT SINCE THE AO HAS NOT RECORDED SATISFACTION HAVING REGARD TO THE ACCOUNTS OF THE A SSESSEE AS TO WHY THE CLAIM OF THE DISALLOWANCE MADE BY THE ASSES SEE U/S.14A IS NOT CORRECT, WHICH IS A PRE-REQUISITE FOR MAKING ANY DISALLOWANCE U/S. 14 A OF THE ACT, THE DISALLOWANCE MADE BY THE AO SHOULD BE DELETED. 21. WE FIND FORCE IN THE ABOVE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE. A PERUSAL OF THE DETAILS FILED IN TH E PAPER BOOK SHOWS THAT THE AO HAS NOT MADE ANY DISALLOWANCE UND ER RULE 8 D (2) (I) BEING EXPENSES DIRECTLY ATTRIBUTABLE. SO F AR AS THE COMPUTATION OF DISALLOWANCE OF RS.8,12,707/- UNDER RULE 8 D (2) (II) IS CONCERNED, WE FIND FROM THE BALANCE SHEET O F THE ASSESSEE THAT THE SHARE HOLDERS FUNDS AT THE BEGINNING AS W ELL AS AT THE END OF THE YEAR IS MUCH MORE THAN THE INVESTMENT MA DE BY THE PAGE | 10 ASSESSEE. IT HAS BEEN HELD BY HONBLE BOMBAY HIGH C OURT IN THE CASE OF HDFC BANK LIMITED REPORTED IN 366 ITR 505 T HAT WHERE INTEREST FREE FUNDS ARE MORE THAN ENOUGH TO COVER T HE INVESTMENTS, NO DISALLOWANCE CAN BE MADE UNDER RULE 8 D (2) (II) OF THE IT ACT. SIMILAR VIEW HAS BEEN HELD BY THE HO NBLE SUPREME COURT IN THE CASE OF RELIANCE INDUSTRIES LIMITED. S INCE THE SHARE HOLDERS FUNDS IN THE INSTANT CASE IS MUCH MORE THA N THE INVESTMENTS MADE BY THE ASSESSEE BOTH AT THE BEGINN ING AS WELL AS AT THE END OF THE YEAR, THEREFORE, NO DISALLOWAN CE OF INTEREST UNDER RULE 8 D (2) (II) IS CALLED FOR. 22. A PERUSAL OF THE DETAILS FURNISHED BY THE ASSE SSEE SHOWS THAT IT HAS RECEIVED DIVIDEND INCOME OF RS. 17,54,0 46/- FROM INVESTMENT MADE IN FOUR COMPANIES. THE DELHI (SPEC IAL BENCH) OF THE TRIBUNAL IN THE CASE OF VIREET INVESTMENT PRIVA TE LIMITED (SUPRA) HAS HELD THAT FOR COMPUTING DISALLOWANCE UN DER RULE 8 D (2) (III) ONLY THOSE INVESTMENT ARE TO BE CONSIDERE D FOR COMPUTING THE AVERAGE VALUE OF INVESTMENT THAT HAVE YIELDED E XEMPT INCOME DURING THE YEAR UNDER REFERENCE. FROM THE DETAILS F URNISHED BY THE ASSESSEE WE FIND THAT IT HAS COMPUTED SUO-MOTO DISALLOWANCE OF RS.86,351/-. FURTHER A PERUSAL OF THE DETAILS OF THE EXPENSES OTHER THAN INTEREST EXPENSES SHOWS THAT ASSESSEE HA S INCURRED EXPENDITURE OF RS.7,57,100/- TOWARDS ADMINISTRATIVE EXPENSES. AFTER DEDUCTING EXPENSES INCURRED BY THE ASSESSEE O N ACCOUNT OF INCREASE IN SHARE CAPITAL, STAMP DUTY EXPENSES AND GRATUITY EXPENSES AT RS.2,93,206/- THE TOTAL ADMINISTRATIVE EXPENSES COMES TO RS. 4,63,894/- AGAINST WHICH THE ASSESSEE HAS MADE PAGE | 11 SUO-MOTO DISALLOWANCE OF RS.86,351/- WHICH IS APPRO XIMATELY 18.61% OF THE ADMINISTRATIVE EXPENSES. HOWEVER, WIT HOUT RECORDING ANY SATISFACTION THE AO HAS MADE THE DISA LLOWANCE U/S. 14 A READ WITH RULE 8 D OF THE IT RULES 1962 WHICH IN OUR OPINION IS NOT JUSTIFIED. 23. THE HONBLE SUPREME COURT IN THE CASE OF MAXOPP INVESTMENT LIMITED (SUPRA) HAS HELD THAT WHEN SUOMO TO DISALLOWANCE ARE SHOWN BY THE ASSESSEE, WITHOUT REC ORDING THE SATISFACTION AS TO WHY THE WORKING SHOWN BY THE ASS ESSEE IS NOT ACCEPTABLE, DISALLOWANCE CANNOT BE MADE. THE RELEVA NT OBSERVATION OF THE HONBLE SUPREME COURT AT PARA 41 OF THE ORDER READS AS UNDER :- 41) HAVING REGARD TO THE LANGUAGE OF SECTION 14A(2 ) OF THE ACT, READ WITH RULE 8D OF THE RULES, WE ALSO MAKE IT CLEAR TH AT BEFORE APPLYING THE THEORY OF APPORTIONMENT, THE AO NEEDS TO RECORD SATISFACTION THAT HAVING REGARD TO THE KIND OF THE ASSESSEE, SUO-MOTO DISALLOWANCE UNDER SECTION 14A WAS NOT CORRECT. IT WILL BE IN TH OSE CASES WHERE THE ASSESSEE IN HIS RETURN HAS HIMSELF APPORTIONED BUT THE AO WAS NOT ACCEPTING THE SAID APPORTIONMENT. IN THAT EVENT UALITY, IT WILL HAVE TO RECORD ITS SATISFACTION TO THIS EFFECT. FURTHER, WHILE RECORDING SUCH A SATISFACTION, NATURE OF LOAN TAKEN BY THE ASSESSE E FOR PURCHASING THE SHARES/MAKING THE INVESTMENT IN SHARES IS TO BE EXAMINED BY THE AO. 24. HOWEVER, A PERUSAL OF THE ASSESSMENT ORDER NOW HERE SHOWS THAT THE AO HAS RECORDED ANY SATISFACTION AS TO WHY THE SUO-MOTO DISALLOWANCE MADE BY THE ASSESSEE IS NOT C ORRECT. THEREFORE, WE FIND MERIT IN THE ARGUMENT OF THE LD. COUNSEL FOR PAGE | 12 THE ASSESSEE THAT IN ABSENCE OF RECORDING OF ANY SA TISFACTION BY THE AO HAVING REGARD TO THE ACCOUNTS OF THE ASSESSE S AS TO WHY THE CLAIM OF DISALLOWANCE MADE BY THE ASSESSEE U/S. 14 A IS NOT CORRECT, NO DISALLOWANCE CAN BE MADE. 25. THE VARIOUS DECISIONS RELIED BY THE LD. DR ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. WE FIN D BOTH THE DECISIONS RELIED ON BY HIM ARE PRIOR TO THE DECISIO N OF HONBLE SUPREME COURT IN THE CASE OF MAXOPP INVESTMENT LIMI TED (SUPRA). IN VIEW OF THE ABOVE DISCUSSION WE HOLD THAT NO FUR THER DISALLOWANCE U/S. 14 A R.W.R 8 D COULD HAVE BEEN MA DE. THEREFORE, GROUND OF APPEAL NO.2 AND 3 BY THE ASSES SEE ARE ALLOWED. 26. SO FAR AS GROUND OF APPEAL NO.4 IS CONCERNED TH E ASSESSEE IS AGGRIEVED BY THE ORDER OF THE LD. CIT(A) IN NOT ADJUDICATING THE GROUNDS RAISED BEFORE HIM REGARDING THE ADDITION MA DE BY THE AO OF RS.70,97,681/-. 27. AFTER HEARING BOTH THE SIDES WE FIND THE AO WIT HOUT ANY DISCUSSION IN THE BODY OF THE ASSESSMENT ORDER MADE ADDITION OF RS.70,97,681/- UNDER THE HEAD INCOME FROM CAPITAL GAIN. WE FIND ALTHOUGH THE ASSESSEE HAS RAISED SPECIFIC GROU ND BEFORE THE CIT(A), HOWEVER, THE LD. CIT(A) HAS NOT ADJUDICATED THE SAME. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE A ND IN THE INTEREST OF JUSTICE WE DEEM IT PROPER TO RESTORE THE ISSUE T O THE FILE OF THE AO WITH A DIRECTION TO GRANT ONE MORE OPPORTUNITY T O THE ASSESSEE PAGE | 13 TO SUBSTANTIATE ITS CASE. THE AO SHALL DECIDE THE ISSUE AS PER FACT AND LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDING. THE GROUN D NO. 4 BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. THE GR OUND NO.1 BEING GENERAL IN NATURE IS DISMISSED. 28. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NO. 8203/DEL/2018 (A. Y. 2013-14) THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER :- 1. THAT ORDER OF LOWER AUTHORITY IS BAD IN LAW AND IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND TOTAL ADDIT ION AND TAX ON LTCG IS UNSUSTAINABLE. 2. THAT LD. CIT(A) ERRED IN SUSTAINING THE DISALLOWANC E OF RS.13,80,676/- MADE U/S. 14A, WITHOUT APPRECIATING THE FACT THAT THE SAME IS WITHOUT COMPLYING WITH THE MANDATO RY CONDITIONS OF SAID PROVISION, (A) WITHOUT RECORDING SATISFACTION ABOUT INCURRING OF EXPENDITURE RELATING TO EXEMPT INCOME WITH REGARD TO ACCOUNTS. (B) WITHOUT EVEN CONSIDERING THE DISALLOWANCE MADE BY A SSESSEE AND DEMONSTRATING SAME AS WRONG ETC. 3. THAT LD. CIT(A) FURTHER ERRED IN NOT CONSIDERING TH E FACT THAT ASSESSEE IS HAVING MORE INTEREST FREE FUNDS THAN TH E INVESTMENT UNDER DIVIDEND BEARING SECURITIES. PAGE | 14 4. THAT LD. CIT(A) GROSSLY ERRED IN NOT EVEN ADDRESSIN G THE ISSUE OF WRONGLY TAXING LTCG RS.63,61,718/- ON STT PAID SHAR ES WHICH IS EXEMPT U/S. 10 (38) OF THE ACT. 2. AFTER HEARING BOTH THE SIDES WE FIND GROUND OF A PPEAL NO. 2 AND 3 BY THE ASSESSEE ARE IDENTICAL TO GROUND APPEA L NO. 2 AND 3 IN ITA NO. 8202/DEL/2018. WE HAVE ALREADY DECIDED THE ISSUE AND GROUNDS RAISED BY THE ASSESSEE HAVE BEEN ALLOWE D. FOLLOWING SIMILAR REASONING THE GROUNDS RAISED BY THE ASSESSE E ARE ALLOWED. 3. SO FAR AS GROUND OF APPEAL NO.4 IS CONCERNED WE FIND THE ABOVE GROUND IS IDENTICAL TO GROUND NO.4 IN ITA NO.8202/DEL/2018. WE HAVE ALREADY RESTORED THE ISS UE TO THE FILE OF THE AO FOR ADJUDICATION OF THE ISSUE AFRESH AFTE R GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. FOLLOWI NG SIMILAR REASONING THE ISSUE RAISED IN GROUND OF APPEAL NO.4 IS RESTORED TO THE FILE OF THE AO FOR ADJUDICATION OF THE ISSUE AF RESH AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AC CORDINGLY APPEAL NO.4 IS ALLOWED FOR STATISTICAL PURPOSE. 4. GROUND OF APPEAL NO.1 BEING GENERAL IN NATURE I S DISMISSED. PAGE | 15 5. IN THE RESULT, BOTH THE APPEALS FILED BY THE RES PECTIVE ASSESSEES ARE PARTLY ALLOWED FOR STATISTICAL PURPOS E. ORDER PRONOUNCED IN THE OPEN COURT ON 14.07.2020. SD/- SD/- (SUCHITRA KAMBLE) (R.K PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER *NEHA* DATE:- 14.07.2020 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 02.07.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 09.07.2020 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS 14.07.2020 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 14.07.2020 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 14.07.2020 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 16.07.2020 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 16.07.2020 DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER