SAMARPAN FABRICATORS P. LTD, MUMBAI V. ITO 2(3)1, MUMBAI

ITA 8369/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71835 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 12-11-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 09-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHOK SURI
• Assessee Lawyers: HARSHAVARDHAN DATAR
• Keywords: Opportunity of being heard; Earning of tax free income; Proportionate interest; Commercial expediency
• Section: 14A; 37(1); 37; 139

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . . , . , BEFORE SHRI I.P. BANSAL, JM AND SHRI KARUNAKARA RAO, AM ./I.T.A. NO.8369/M/2011 ( / ASSESSMENT YEAR: 2005 - 2006) M/S. SAMARPAN FABRICATORS PVT. LTD., C/O. JAYESH SANGHRAJKA & CO, 405 - 408, HIND RAJASTHAN CENTER, D.S. PHALKE ROAD, DADAR (E), MUMBAI 400 014. / VS. ITO - 2(3) - 1, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI. ./ PAN : AAATS 0257 K ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI HARSHAVARDHAN DATAR / RESPONDENT BY : SHRI ASHOK SURI, DR / DATE OF HEARING : 12.11.2013 / DATE OF PRONOUNCEMENT : 06 .12.2013 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 9.12.2011 IS AGAINST THE ORDER OF CIT (A) - 6, MUMBAI DATED 14.9.2011 FOR THE ASSESSMENT YEAR 2005 - 2006. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE GIVEN FACTS AND CIRCUMSTANCES AND JUDICIAL PRONOUNCEMENTS, AO ERRED IN DISALLOWING TRAVELLING EXPENSES TO THE TUNE OF RS. 36,000/ - BY RENDERING IT PERSONAL EXPENSES ON AD - HOC BASIS . SUCH ADDITION OF AO AND ITS CONFIRMATION BY THE CIT (A) IS BAD IN LAW AND LIABLE TO BE DELETED. 2. ON THE FACTS AND CIRCUMSTAN CES AND JUDICIAL PRONOUNCEMENTS, AO ERRED IN DISA LLOWING TELEPHONE EXPENSES TO THE TUNE OF RS. 60,131/ - BY RENDERING IT PERSONAL EXPENSES ON AD - HOC BASIS. SUCH ADDITION OF AO AND ITS CONFIRMATION BY CIT (A) IS BAD IN LAW AND LIABLE TO BE DELETED. 3. ON THE GIVEN FACTS AND CIRCUMSTANCES AND JUDICIAL PRONOUNCEMENT, AO ERRED IN MAKING THE ADDITION OF RS. 5000/ - BY DISALLOWING SALES TAX PENALTY . SUCH ADDITION OF AO AND ITS CONFIRMATION BY CIT (A) IS BAD IN LAW AND LIABLE TO BE DELETED. 2 4. ON THE GIVEN FAC TS AND CIRCUMSTANCES AND JUDICIAL PRONOUNCEMENTS, AO ERRED IN MAKING THE ADDITION OF RS. 5388/ - BY DISALLOWING PENALTY IMPOSED BY THE CUSTOMER OF THE ASSESSEE DUE TO BREACH OF CONTRACT . SUCH ADDITION OF AO AND ITS CONFIRMATION BY CIT (A) IS BAD IN LAW AND LIABLE TO BE DELETED. 5. ON THE GIVEN FACTS AND CIRCUMSTANCES AND JUDICIAL PRONOUNCEMENTS, AO ERRED IN MAKING THE ADDITION OF RS. 23,000/ - BY DISALLOWING PENALTY IMPOSED BY DIRECTOR GENERAL OF FOREIGN TRADE DUE TO NON COMPLETION OF EXPORT TARGET . SUCH AD DITION OF AO AND ITS CONFIRMATION BY CIT (A) IS BAD IN LAW AND LIABLE TO BE DELETED. 6. ON THE GIVEN FACTS AND CIRCUMSTANCES AND JUDICIAL PRONOUNCEMENT, AO ERRED IN DISALLOWING FIXED ASSET WRITTEN OFF RS. 3,17,656/ - . SUCH ADDITION OF AO AND ITS CONFIRMATI ON BY CIT (A) IS BAD IN LAW AND LIABLE TO BE DELETED. 7. ON THE GIVEN FACTS AND CIRCUMSTANCES AND JUDICIAL PRONOUNCEMENT, AO ERRED IN MAKING THE ADDITION ON ACCOUNT OF EMPLOYEES CONTRIBUTION OF PROVIDENT FUND TO THE TUNE OF RS. 2931/ - EVEN THOUGH THESE AMO UNTS WERE DULY PAID BEFORE FILING THE RETURNS WITHIN THE LIMITED STIPULATED UNDER SECTION 139 SUBSECTION 1 OF THE INCOME TAX ACT, 1961. SUCH ADDITION OF AO AND ITS CONFIRMATION BY CIT (A) IS BAD IN LAW AND LIABLE TO BE DELETED. 8. ON THE GIVEN FACTS AND C IRCUMSTANCES, AO ERRED IN MAKING THE ADDITION ON ACCOUNT OF INTEREST EXPENDITURE TO THE EXTENT OF RS. 9,39,149/ - . SUCH ADDITION OF AO AND ITS CONFIRMATION BY CIT (A) IS BAD IN LAW AND LIABLE TO BE DELETED. 9. ON THE GIVEN FACTS AND CIRCUMSTANCES AND JUDIC IAL PRONOUNCEMENTS, AO ERRED IN DISALLOWING PROPORTIONATE EXPENSES TO THE TUNE OF RS. 1,49,207/ - BY INVOKING SECTION 14A OF THE ACT. SUCH ADDITION OF AO AND ITS CONFIRMATION BY CIT (A) IS BAD IN LAW AND LIABLE TO BE DELETED. 10. ON THE GIVEN FACTS AND CI RCUMSTANCES AND JUDICIAL PRONOUNCEMENT, LD CIT (A) ERRED IN DIRECTING THE ASSESSEE TO PRODUCE EVIDENCES BEFORE THE AO FOR GROUNDS THAT ARE ALLOWED DURING THE FIRST APPELLATE STAGE, WHICH IS NOT IN ACCORDANCE WITH SECTION 251 OF THE ACT, WHICH IS TO BE DELE TED. 11. ON THE GIVEN FACTS AND CIRCUMSTANCES AND JUDICIAL PRONOUNCEMENT, AO ERRED IN CHARGING INTEREST UNDER CHAPTER XVII F OF THE A CT AFTER CONSIDERING ALL THE AFORESAID ADJUSTMENTS. SUCH ADDITION OF AO AND ITS CONFIRMATION BY THE CIT (A) IS BAD IN LAW AND LIABLE TO BE DELETED. 3. AT THE OUTSET, SHRI HARSHAVARDHAN DATAR, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT CONSIDERING THE SMALLNESS OF ADDITIONS, SOME OF THE GROUNDS RAISED IN THE APPEAL ARE NOT PRESSED. IN THIS REGARD, LD COUNSEL BROUGHT OUR ATTENTION TO THE GROUND NO.1 RELATING TO DISALLOWANCE OF TRAVELLING EXPENSE S OF RS. 36,000/ - , GROUND NO.2 RELATING TO DISALLOWANCE OF RS.60,131/ - ON ACCOUNT OF TELEPHONE EXPENSES ARE NOT PRESSED. AFTER HEARING BOTH THE PARTIES, THE SAID GROUND NO.1 , 2 AND 10 ARE DISMISSED AS NOT PRESSED. 4. FURTHER, HE REFERRED GROUND NO.6 REL ATING TO DISALLOWANCE OF RS. 3,17,656/ - FIXED ASSET WRITTEN OFF AND FAIRLY MENTIONED THAT THERE IS NOTHING FOR THE ASSESSEE TO SUBMIT IN THIS REGARD. ON THE OTHER HAND, LD DR ARGUED FOR CONFIRMING THE DECISION OF THE CIT (A) AND THE AO AND THE SAID DISALL OWANCE. AFTER HEARING BOTH THE PARTIES AND CONSIDERING THE FAIR SUBMISSION OF ASSESSEE REGARDING THE ABSENCE OF EVIDENCE IN 3 THIS REGARD, WE FIND NO REASON TO INTERFERE WITH THE CONCLUSIONS OF THE AO / CIT (A). THEREFORE, THE ORDER OF THE CIT (A) DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND NO.6 IS DISMISSED . 5. BRINGING OUR ATTENTION TO GROUND NO.11 , LD COUNSEL MENTIONED THAT THE SAID GROUND RELATES TO LEVY OF STATUTORY INTEREST AND THE SAME BEING CONSEQUENTIAL NATURE, NO SEPARATE ADJUDICATION IS WARRANTED. ACCORDINGLY, GROUND NO.11 IS DISMISSED AS CONSEQUENTIAL. 6. FURTHER, BRINGING OUR ATTENTION T O GROUND NO.3 , WHICH RELATES TO ADDITION OF RS. 5000/ - FROM THE SALES TAX PENALTY ACCOUNT, LD COUNSEL MENTIONED THAT THE PENALTY WAS LEVIED FOR LATE IN FILING THE SALES TAX RETURNS. FURTHER, REFERRING TO GROUND NO.4 , ASSESSEE SUBMITTED THAT THE SAID GROUN D RELATES TO THE ADDITION OF RS. 5,388/ - OUT OF THE PENALTY IMPOSED BY THE CUSTOMER OF THE ASSESSEE FOR BREACH OF CONTRACT. REFERRING TO GROUND NO.5 , LD COUNSEL MENTIONED THAT THE SAID GROUND RELATES TO ADDITION OF RS. 23,000/ - RELATING TO PENALTY IMPOSED BY THE DIRECTOR GENERAL OF FOREIGN TRADE (DGFT) FOR NON - COMPLETION OF EXPORT TARGET. IN CONNECTION WITH GROUND NOS. 3 TO 5, LD COUNSEL MENTIONED THAT THESE PENALTIES ARE LEVIED NO T FOR INFRACTION OF ANY LAW ATTRACTIN G THE EXPLANATION OF SECTION 37 (1) OF THE ACT. IT IS AN OFFENCE, WHICH IS PROHIBITED BY LAW. THE PENALTIES ARE LEVIED FOR PROCEDURAL FAILURES. THIS ASPECT WAS NOT DISPUTED BY THE CIT (A). 7. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE AO / CIT (A). 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE MATERIAL PLACED BEFORE US. ON PERUSAL OF THE FACTS, WE FIND THAT NON - COMPLIANCE TO THE TARGET SET BY THE DGFT AND OTHER PENALTIES FOR BREACH OF CONTRACT, IN OUR OPINION WILL NOT FALL WITHIN THE SCOPE OF THE SAID EXPLANATION TO SECTION 37(1) OF THE ACT. IN THIS REGARD, ASSESSEE RELIED ON VARIOUS DECISIONS I.E., THE JUDGMENT OF THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS RAJKUMAR MILLS LTD ., 135 ITR 811 FOR THE PROPOSITION THAT THE PENALTIES OF THIS KIND NOT ATTRACT THE PROVISIONS OF EXPLANATION TO SECTION 37(1) OF THE ACT . ON THE OTHER HAND, LD DR HAS NOT BROUGHT ANY DECISIONS CONTRARY IN THIS REGARD. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT THE ADDITIONS MADE BY THE A O AND CONFIRMED BY THE CIT (A) ON ACCOUNT OF PENALTY ARE NOT SUSTAINABLE. ACCORDINGLY, GROUND NOS. 3, 4 AND 5 ARE ALLOWED . 4 9. REGARDING GROUND NO.7 , LD COUNSEL MENTIONED THAT THE SAID GROUND RELATES TO THE DISALLOWANCE OF RS. 2931/ - . THIS IS THE EMPLOYEES CONTRIBUTION TO THE PROVIDENT FUND AND THESE AMOUNTS WERE ACTUALLY PAID BEFORE FILING OF THE RETURN. IT IS THE ARGUMENT OF THE ASSESSEE THAT THE SAID AMOUNT IS ALLOWABLE AS PAYMENTS WERE MADE BEFORE BE FILING OF THE RETURNS WITHIN DUE DATES PRESCRIBED U/ S 139(1) OF THE ACT. IN THIS REGARD, HE RELIED ON THE BINDING JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. ALOM EXTRUSIONS (2009) 319 ITR 306 (SC) . ON FINDING THAT THE SAID AMOUNTS ARE PAID BEFORE FILING THE RETURN OF INCOME, WE ARE OF TH E OPINION THAT THE CLAIM OF THE ASSESSEE IS ALLOWABLE. ACCORDINGLY, THE GROUND NO.7 IS ALLOWED. 10. GROUND NO.8 RELATES TO THE ADDITION OF RS. 9,39,149/ - ON ACCOUNT OF INTEREST EXPENDITURE. DURING THE ASSESSMENT PROCEEDINGS, AO NOTICED THAT THE ASSESSEE HAS MADE INTEREST PAYMENT ON ACCOUNT OF LOAN TAKEN FROM THE DIRECTORS / SHARESHOLDERS OF THE ASSESSSEE - COMPANY TO THE TUNE OF RS. 9,39,149/ - . FURTHER AO FOUND THAT THE ASSESSEE - COMPANY HAS GIVEN INTEREST FREE ADVANCES TO THE TUNE OF RS. 1,12,80, 671/ - TO ITS SUBSIDIARIES. IN THIS REGARD ASSESSEE WAS ASKED TO EXPLAIN WHETHER INTEREST BEARING FUNDS ARE UTILIZED FOR GIVING LOANS TO SUBSIDIARY COMPANIES. CONSIDERING THE ASSESSEES FAILURE T O ESTABLISH THAT NO INTEREST BEARING FUNDS WERE UTILIZED FOR GIVING LOANS TO ITS SUBSIDIARIES, THE PROPORTIONATE INTEREST PAID ON LOAN TAKEN IS DISALLOWED BY THE AO. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 11. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) DISMISSED THE APPEAL. PARAS 8.3 TO 8.3.2 OF THE CIT (A)S ORDER ARE RELEVANT IN THIS REGARD. AGGRIEVED WITH THE DECISION OF THE CIT (A), ASSESSEE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL BY RAISING THE GROUND NO.8 MENTIONED ABOVE. 12. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. FURTHER, LD COUNSEL MENTIONED THAT THE INTEREST PAID TO DIRECTORS / SHAREHOLDERS ARE INCURRED FOR THE BUSINESS PURPOSES ONLY AND THE INTEREST PAID ON SUCH LOANS BECOMES ELIGIBLE FOR DEDUCTION U/S 36(1)(III) OF THE ACT. IN THIS REGARD, LD COUNSEL RELIED ON VARIOUS JUDGMENTS . 13. ON THE OTHER HAND, LD DR RELIED HEAVILY ON THE ORDERS OF THE AO AND TH E CIT (A). FURTHER, LD DR MENTIONED THAT THE SECTION 36(1)(III) OF THE ACT PROVIDES FOR DEDUCTION FOR PAYMENT OF INTEREST ONLY IF THE ASSESSEE BORROWS CAPITAL FOR ITS OWN 5 BUSINESS. THE BUSINESS OF THE SUBSIDIARY COMPANY CANNOT BE CONSIDERED IN LAW AS THE BUSINESS OF THE ASSESSEE. 14. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE MATERIAL PLACED BEFORE US. WE HAVE PERUSED THE CIT (A)S ORDER IN GENERAL AND PARAS 8.3 TO 8.3.2 IN PARTICULAR AND CONSIDERING THE SIGNIFICANCE OF THESE PARAS, THE SAME ARE REPRODUCED AS UNDER: 8.3. I HAVE GONE THROUGH THE ORDER OF THE AO AND THE SUBMISSIONS OF THE APPELLANT. THE AO AT PAGE 7 HAS GIVEN LIST OF LOANS TAKEN FROM 7 SHAREHOLDERS AND CANARA BANK, GHATKOPAR (E) AND THE APPELLANT HAS PAID INTEREST TO THE SHAREHOLDERS AND CANARA BANK AMOUNTING TO RS. 9,38,051/ - , THE OPENING BALANCE OF LOAN TAKEN AT RS. 1,28,90,142/ - AS ON 1.4.2001 AND THE CLOSING BALANCE OF LOAN TAKEN IS AT RS. 99,54 ,156/ - AS ON 31.3.2005. 8.3.1. IN CASE OF S.A. BUILDERS VS. CIT , 288 ITR 1, IT WAS HELD THAT COMMERCIAL EXPEDIENCY IS NECESSARY FOR DEDUCTION U/S 36(1)(III) . THE APPELLANT HAS GIVEN LOANS TO 3 SISTER CONCERNS IN WHICH THE DIRECTORS OF THE ASSESSEE COMPANY ARE SUBSTANTIALLY INTERESTED AND NO REASON WHATSOEVER HAS BEEN GIVEN AS TO HOW GIVING INTEREST FREE ADVANCES WERE THE COMMERCIAL EXPEDIENCY FOR THE ASSESSEE . 8.3.2. T HE APPELLANT HAS PAID INTEREST TO THE SHAREHOLDERS BUT HAS NOT RECEIVED INTEREST FROM THE SISTER CONCERNS. THUS, THE INTEREST AMOUNT PAID TO SHAREHOLDERS FOR THE AMOUNTS WHICH WAS USED FOR GIVING INTEREST FREE ADVANCES TO THE SISTER CONCERNS WERE NOT EXP ENSES INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF A BUSINESS. THE ADDITION OF RS. 9,39,149 / - IS THEREFORE, CONFIRMED. GROUND 12 IS DISMISSED. 15. FROM THE ABOVE, WE FIND THAT THE ASSESSEE HAS PAID INTEREST TO THE SHAREHOLDERS AGAINST THE LOAN TAKEN BUT HAS NOT RECEIVED ANY INTEREST AMOUNTS FROM THE SISTER CONCERNS CLAIMING THAT THE ADVANCES WERE GIVEN TO THE SUBSIDIARIES ARE INTEREST FREE ADVANCES. IN CONNECTION WITH THE INTEREST FREE ADVANCES GIVEN TO THE SUBSIDIARIES, THE ASSESSEE COULD NOT ESTABLISH HOW THE ADVANCES CONSTITUTE COMMERCIAL EXPEDIENCY FOR THE ASSESSEE - COMPANY , WHICH IS REQUIRED TO BE COMPLIED WITH FOR CLAIMING DEDU CTION U/S 36(1)(III) OF THE ACT. IN THESE CIRCUMSTANCES, F OR THE PURPOSE OF EXAMINING THE ISSUE THAT WHETHER THE I NTEREST FREE ADVANCES GIVEN TO THE SUBSIDIARIES CONSTITUTE S COMMERCIAL EXPEDIENCY AS REQUIRED U/S 36(1)(III) , WE ARE OF THE OPINION THAT THE MATTER SHOULD BE REMANDED TO THE FILES OF THE CIT (A). ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT (A) AND REM IT THE MATTER TO THE FILES OF THE CIT (A) TO EXAMINE AND DECIDE THE ISSUE AFRESH . CIT (A) IS ALSO DIRECTED TO WRITE A SPEAKING ORDER ON THIS ISSUE IN THE LIGHT OF THE JUDICIAL PRECEDENTS AND IN ACCORDANCE WITH THE LAW IN FORCE. IN THE SET ASIDE PROCEEDIN GS, ASSESSEE SHALL BE 6 GRANTED A REASONABLE OPPORTUNITY OF BEING HEARD . ACCORDINGLY, GROUND NO.8 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 16. GROUND NO.9 RELATES TO DISALLOWANCE U/S 14A OF THE ACT. IN THIS REGARD, LD COUNSEL SUBMITTED THAT THE DISALLOWANCE OF RS. 1,49,207/ - IS VERY EXCESSIVE CONSIDERING THE EXEMPT INCOME OF RS. 1,51,875/ - . RELEVANT FACTS ARE GIVEN IN PAGE 9 - 12 OF THE ASSESSMENT ORDER. AO DETERMINED THE SAID AMOUNT CONSIDERING THE APPORTIONMENT OF GROSS EXPENSES OF RS. 16,59,75,968/ - BETWEEN THE RECEIPTS AND THE EXEMPT INCOME. ASSESSING OFFICER HAS NOT APPLIED THE PROVISIONS OF RULE 8D IN THIS REGARD. CIT (A) CONFIRMED THE SAME BY HOLD ING THAT THE ASSESSEE FAILED TO ESTABLISH THE NEXUS AND ALSO FINDING THAT THE ASSESSEE HAS NOT OFFERED ANY EXPENDITURE FOR EARNING OF THIS EXEMPT INCOME. 17. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL MENTIONED THAT THE LIKELY DISALLOWANCE AS PER THE PROVISIONS OF RULE 8D WILL WORK OUT TO A SUM OF RS. 13,667/ - ONLY. IN THIS REGARD, ASSESSEE BROUGHT OUR ATTENTION TO PAGE 32A OF THE PAPER BOOK. FURTHER, HE AL SO MENTIONED THAT THE DISALLOWANCE OF RS. 151,875/ - IS ON VERY HIGHER SIDE. 18. ON THE OTHER HAND, LD DR RELIED HEAVILY ON THE ORDERS OF THE AO AND THE CIT (A). 19. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. IT IS THE CASE OF THE ASSESSEE THAT BY APPLYING THE RULE 8D, THE DISALLOWANCE WILL NOT EXCEED TO RS. 14,000/ - OR RS. 13,667/ - TO BE PRECISE. REASONABLE BASIS AS ENUNCIATED IN THE CASE OF CIT VS. GODREJ BOYCE MFG. CO. LTD, 328 ITR 81 IMPLIES AFTER CONSIDERING THE FACTS OF THE PRESENT CASE WHERE THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE FOR EARNING OF THE DIVIDEND INCOME. WE FIND MERIT IN THE ARGUMENT OF THE LD COUNSEL REGARDING THE EXCESSIVENESS OF THE ADDITIO N CONSIDERING THE METHOD APPLIED BY THE AON IN QUANTIFYING THE RELATABLE EXPENDITURE TO THE EXEMPT INCOME. CONSIDERING THE BASIC FACTS OF THE PRESENT CASE AND THE CONCESSION OFFERED BY THE LD COUNSEL BEFORE US, WE ARE OF THE OPINION THAT THE QUANTIFICATIO N IN ACCORDANCE WITH THE PROVISIONS OF RULE - 8D IS UPHELD AND THE DISALLOWANCE MAY BE RESTRICTED TO RS. 14,000/ - OR ANY OTHER AMOUNT THAT MAY BE DETERMINED THE SAID RULE - 8D OF IT RULES, 1962. AO IS DIRECTED TO EVOLVE THE CORRECT WORKING IN THIS REGARD AND DISALLOW ACCORDINGLY. 7 ACCORDINGLY, GROUND NO.9 RAISED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 20. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONO UNCED IN THE OPEN CO URT ON 6 T H DECEMBER, 2013. S D / - S D / - ( I.P. BANSAL) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 6 .12.2013 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI