M/s Punjab State Coop Milk Producers Federation Ltd., Chandigarh V. ACIT, Chandigarh

ITA 869/CHANDI/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86117 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-12-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 27-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMARVEER SINGH
• Keywords: Question of law; Non passing of speaking order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO. 869/CHD/2013 ASSESSMENT YEAR: 2010-11 M/S PUNJAB STATE COOP MILK , VS. ACIT PRODUCERS FEDERATION LTD. CIRCLE-4(1) SCO NO. 153-155 CHANDIGARH SECTOR 34A CHANDIGARH PAN NO.AAAAP1208Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.R. SHARMA RESPONDENT BY : SHRI. AMARVEER SINGH DATE OF HEARING : 23/12/2014 DATE OF PRONOUNCEMENT : 12/01/2015 ORDER PER T.R.SOOD, A.M. THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A), CHANDIGARH ON 25/05/2013 2. IN THIS APPEAL ASSESSEE HAS RAISED THE FOLLOWING GROUNDS 1. THAT THE ORDER OF THE ASSESSING OFFICER AS UPHELD BY THE COMMISSIONER OF INCOME TAX (APPEALS) CHANDIGARH IS BAD IN LAW AND IS BEYOND ALL THE CANNONS OF LAW AND JUSTICE. 2. THAT THE ORDER OF THE ASSESSING OFFICER AS UPHELD BY THE COMMISSIONER OF INCOME TAX (APPEALS) CHANDIGARH HOLDING THAT THE PROVISIONS OF SECTION 14 A ARE APPLICABLE WITH RESPECT TO THE INCOME ENTITLE TO DEDUCTION UNDER THE PROVISION OF SECTION 80P(2)(D) TO THE APPELLANT BEING A COOPERATIVE SOCIETY IN VIEW OF THE DECISION OF THE HONBLE DELH I HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. KRIBHCO 349 ITR PAGE 618 AS UPHELD BY THE HONBLE SUPREME COURT OF INDIA IS BAD IN LAW AND NEEDS TO BE SET ASIDE. 3. THAT THE ORDER OF THE ASSESSING OFFICER AS UPHELD BY THE COMMISSIONER OF INCOME TAX (APPEALS) CHANDIGARH HOLDING RS. 60,58,021/- AS EXPENSES ATTRIBUTABLE TO THE INCOME ENTITLE TO DEDUCTION U/S 80P(2)(D) ON THE BASIS OF EARLIER YEARS MORE SO WHEN THE RULE 8D WAS APPLICABLE TO DETERMINE SUCH EXPENSES IS BAD IN LAW AND NEEDS TO BE SET ASIDE. 4. THAT THE ORDER OF THE ASSESSING OFFICER AS UPHELD BY THE COMMISSIONER OF INCOME TAX (APPEALS) CHANDIGARH ATTRIBUTING OUT OF TOTAL EXPENSES OF THE HEAD OFFICE TO THE EARNING OF INTEREST INCOME IS BAD IN LAW AND NEEDS TO BE SET-ASIDE. 5. THAT THE ORDER OF THE ASSESSING OFFICER AS UPHELD BY THE COMMISSIONER OF INCOME TAX (APPEALS) CHANDIGARH ATTRIBUTING THE EXPENSES TO THE EARNING OF THE INTEREST INCOME AS PER THE PROVISION S OF SEC. 57(III) IS AGAINST THE JUDICIAL DECISIONS I N THE BEHALF . 3. AT THE TIME OF HEARING LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT GROUND NO. 1 WAS OF GENERAL NATURE A ND GROUND NO. 2 TO 5 DEAL WITH THE SAME ISSUE I.E; REG ARDING DISALLOWANCE TO BE MADE UNDER SECTION 14 A AND THEN COMPUTING THE DEDUCTION UNDER SECTION 80 P(2)(D). 4. AFTER HEARING BOTH THE PARTIES WE FIND THAT ASSE SSEE HAD CLAIMED DEDUCTION U/S 80P(2)(D) IN RESPECT OF INTER EST INCOME EARNED FROM MEMBER SOCIETIES. THE ASSESSEE DID NOT TAKEN INTO ACCOUNT THE ENTIRE EXPENDITURE ATTRIBUTABLE TO EARN ING OF INTEREST INCOME WHILE COMPUTING THIS DEDUCTION. 5. THE AO NOTED THAT THE TRIBUNAL HAS DECIDED THIS ISSUE AGAINST THE ASSESSEE FOR ASSESSMENT YEAR 2002-03, 2 005-06 & 2006-07 IN THE EARLIER YEAR AND APPEAL OF THE ASSES SEE HAS BEEN DISMISSED BY THE HONBLE HIGH COURT THEREFORE, HE RECOMPUTED THE EXPENSES FOLLOWING THE ORDER OF TRIB UNAL. 6. ON APPEAL THE ACTION OF THE AO WAS CONFIRMED BY THE LD. CIT(A) BECAUSE OF THE DECISION OF TRIBUNAL WHICH WA S AGAINST THE ASSESSEE AND WHICH HAS BEEN CONFIRMED BY THE HO NBLE PUNJAB & HARYANA HIGH COURT. 7. BEFORE US LD. COUNSEL FOR THE ASSESSEE ADMITTED THAT IN THE EARLIER YEARS THE ISSUE WAS DECIDED AGAINST THE ASSESSEE AND THAT DECISION WAS CONFIRMED BY THE HONBLE PUNJ AB & HARYANA HIGH COURT. HOWEVER LATER ON HONBLE DELHI HIGH COURT IN CASE OF CIT VS. M/S. KRIBHCO IN ITA NO. 444/11 D ECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE. AGAINST THIS ORDER THE REVENUE MOVED AN SLP BEFORE THE HONBLE SUPREME COURT WHICH WAS DISMISSED. THEREFORE, NOW THE ISSUE IS COVERED IN F AVOUR OF THE ASSESSEE BY APPLYING THE DOCTRINE OF MERGER. ACCORD ING TO HIM THE ORDER OF HONBLE DELHI HIGH COURT GOT MERGED WI TH THE DECISION OF HONBLE SUPREME COURT. IN THIS REGARD H E RELIED ON THE DECISION OF HONBLE SUPREME COURT IN CASE OF KUNHAYAMMED AND OTHERS VS. STATE OF KERALA AND ANOT HER, 245 ITR 360. HE PARTICULARLY REFERRED TO PAGE 382 WHERE CONCLUSION HAVE BEEN DRAWN BY THE HONBLE SUPREME COURT AND IN WHICH IT HAS BEEN OBSERVED THAT WHEREVER AN APPEAL LIES B EFORE THE HONBLE SUPREME COURT AND THAT ISSUE IS DECIDED THE N THE ORDER OF HIGH COURT WOULD MERGE WITH THE ORDER OF H ONBLE SUPREME COURT. 8. ON THE OTHER HAND LD. DR STRONGLY SUPPORTED THE ORDER OF CIT(A) AND POINTED OUT THAT ISSUES HAS BEEN DECIDED BY THE HONBLE PUNJAB & HARYANA HIGH COURT AGAINST THE ASS ESSEE. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND WE FIND THAT ADMITTEDLY THE ISSUE IS COVERED AGAINS T THE ASSESSEE BY THE EARLIER DECISION OF TRIBUNAL WHICH HAS BEEN CONFIRMED BY THE HONBLE PUNJAB & HARYANA HIGH COUR T IN ITA NO. 530 OF 2006 VIDE ORDER DT. 28/03/2011. NOW THE ONLY QUESTION IS WHETHER THIS DECISION HAS TO BE FOLLOWE D OR THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF CIT VS. KRIBHCO HAS TO BE FOLLOWED. THE ISSUE REGARDING EFFECT OF D ISMISSAL OF SLP WAS CONSIDERED BY THE HONBLE SUPREME COURT IN CASE OF V.M. SALGAOCAR AND BROS. PVT. LTD. VS. CIT, 243 ITR 383 THE COURT POINTED OUT FOLLOWING OBSERVATIONS WHICH IS AS UNDE R: 1 . DIFFERENT CONSIDERATIONS APPLY WHEN A SPECIAL LEAV E PETITION UNDER ARTICLE 136 OF THE CONSTITUTION IS S IMPLY DISMISSED BY SAYING DISMISSED, AND AN APPEAL PROVIDED UNDE R ARTICLE 133 IS DISMISSED ALSO WITH THE WORDS THE APPEAL IS DIS MISSED. IN THE FORMER CASE IT HAS BEEN LAID DOWN BY THIS COURT THA T WHEN A SPECIAL LEAVE PETITION IS DISMISSED THIS COURT DOES NOT COMMENT ON THE CORRECTNESS OR OTHERWISE OF THE ORDER FROM WHIC H LEAVE TO APPEAL IS SOUGHT. BUT WHAT THE COURT MEANS IS THAT IT DOES NOT CONSIDER IT TO BE A FIT CASE FOR EXERCISE OF ITS JU RISDICTION UNDER ARTICLE 136 OF THE CONSTITUTION. THAT CERTAINLY COU LD NOT BE SO WHEN AN APPEAL IS DISMISSED THOUGH BY A NON-SPEAKIN G ORDER. HERE THE DOCTRINE OF MERGER APPLIES. IN THAT CASE, THE SUPREME COURT UPHOLDS THE DECISION OF THE HIGH COURT OR THE TRIBUNAL FROM WHICH THE APPEAL IS PROVIDED UNDER CLAUSE (3) OF AR TICLE 133. THIS DOCTRINE OF MERGER DOES NOT APPLY IN THE CASE OF DI SMISSAL OF A SPECIAL LEAVE PETITION UNDER ARTICLE 136. WHEN AN A PPEAL IS DISMISSED THE ORDER OF THE HIGH COURT IS MERGED WIT H THAT OF THE SUPREME COURT. WE QUOTE THE FOLLOWING PARAGRAPH FRO M THE JUDGMENT OF THIS COURT IN THE CASE OF SUPREME COURT EMPLOYEES WELFARE ASSOCIATION V. UNION OF INDIA, AIR 1990 HON 'BLE SUPREME COURT 334; [1989] 4 SCC 187 (AT PAGE 344 OF AIR 199 0 S.C): 22. IT HAS BEEN ALREADY NOTICE THAT THE SPECIAL LE AVE PETITION FILED ON BEHALF OF THE UNION OF INDIA AGAINST THE SAID JU DGMENTS OF THE DELHI HIGH COURT WERE SUMMARILY DISMISSED BY THIS C OURT. IT IS NOW A WELL SETTLED PRINCIPLE OF LAW THAT WHEN A SPECIAL LEAVE PETITION IS SUMMARILY DISMISSED UNDER ARTICLE 136 OF THE CONSTI TUTION, BY SUCH DISMISSAL THIS COURT DOES NOT LAY DOWN ANY LAW, AS ENVISAGED BY ARTICLE 141 OF THE CONSTITUTION, AS CONTENDED BY TH E LEARNED ATTORNEY-GENERAL. IN INDIAN OIL CORPORATION LTD. V. STATE OF BIHAR [1987] 167 ITR 897; [1986] 4 SCC 146; AIR 1986 HON' BLE SUPREME COURT 1780, IT HAS BEEN HELD BY THIS COURT THAT THE DISMISSAL OF A SPECIAL LEAVE PETITION IN LIMINE BY A NON-SPEAKING ORDER DOES NOT JUSTIFY ANY INFERENCE THAT, BY NECESSARY IMPLICATIO N, THE CONTENTIONS RAISED IN THE SPECIAL LEAVE PETITION ON THE MERITS OF THE CASE HAVE BEEN REJECTED BY THE SUPREME COURT. I T HAS BEEN FURTHER HELD THAT THE EFFECT OF A NON-SPEAKING ORDE R OF DISMISSAL OF A SPECIAL LEAVE PETITION WITHOUT ANYTHING MORE INDI CATING THE GROUNDS OR REASONS OF ITS DISMISSAL MUST, BY NECESS ARY IMPLICATION, BE TAKEN TO BE THAT THE SUPREME COURT HAD DECIDED ONLY THAT IT WAS NOT A FIT CASE WHERE SPECIAL LEAVE SHOULD BE GRANTED. IN UNION OF INDIA V. ALL INDIA SERVICES PE NSIONERS ASSOCIATION [1988] 2 SCC 580; AIR 1988 HON'BLE SUPR EME COURT 501, THIS COURT HAS GIVEN REASONS FOR DISMISSING TH E SPECIAL LEAVE PETITION. WHEN SUCH REASONS ARE GIVEN, THE DECISION BECOMES ONE WHICH ATTRACTS ARTICLE 141 OF THE CONSTITUTION WHIC H PROVIDES THAT THE LAW DECLARED BY THE SUPREME COURT SHALL BE BIND ING ON ALL THE COURTS WITHIN THE TERRITORY OF INDIA. IT, THEREFORE , FOLLOWS THAT WHEN NO REASON IS GIVEN, BUT A SPECIAL LEAVE PETITION IS DISMISSED SIMPLICITER, IT CANNOT BE SAID THAT THERE HAS BEEN A DECLARATION OF LAW BY THIS COURT UNDER ARTICLE 141 OF THE CONSTITU TION. IT WAS, THEREFORE, CONTENDED THAT ONCE THIS COURT I N CIVIL APPEAL NO. 424 OF 1999, HAS DISMISSED THE APPEAL IT HAS UP HELD THE ORDER OF THE HIGH COURT IN THE CASE OF THE ASSESSMENT YEA R 1980-81 AND IT CANNOT TAKE A DIFFERENT VIEW FOR THE ASSESSMENT YEAR 1979-80. THERE APPEARS TO BE SUBSTANCE IN THE SUBMISSION OF THE ASSESSEE. THIS ISSUE WAS AGAIN CONSIDERED BY HONBLE SUPREME COURT IN CASE OF KUNHAYAMMED AND OTHERS VS. STATE O F KERALA AND ANOTHER (SUPRA). IN THAT CASE THIS IS HOW THE Q UESTION AROSE : A QUESTION OF FREQUENT RECURRENCE AND OF SOME SIGNI FICANCE INVOLVING THE LEGAL IMPLICATIONS AND THE IMPACT OF AN ORDER REJECTING A PETITION SEEKING GRANT OF SPECIAL LEAVE TO APPEAL UNDER ARTICLE 136 OF THE CONSTITUTION OF INDIA HAS ARISEN FOR DECISION IN THIS APPEAL . 10. THE HONBLE COURT DISCUSSED AT PAGE 368 TO 370 THE PROVISIONS OF ARTICLE 132 TO 136 OF THE CONSTITUTIO N AND NOTED THE PROCEDURE OF DECIDING SPECIAL LEAVE PETITION. T HEREAFTER AT PAGE 372 IT WAS OBSERVED AS UNDER: IT IS NOT THE POLICY OF THIS COURT TO ENTERTAIN S PECIAL LEAVE PETITION AND GRANT LEAVE UNDER ARTICLE 136 OF THE C ONSTITUTION SAVE IN THOSE CASES WHERE SOME SUBSTANTIAL QUESTION OF LAW OF GENERAL OR PUBLIC IMPORTANCE IS INVOLVED OR THERE I S MANIFEST INJUSTICE RESULTING FROM THE IMPUGNED ORDER OR JUDG MENT. THE DISMISSAL OF A SPECIAL LEAVE PETITION IN LIMINE BY A NON SPEAKING ORDER DOES NOT, THEREFORE, JUSTIFY ANY INF ERENCE THAT BY NECESSARY IMPLICATION THE CONTENTIONS RAISED IN THE SPECIAL LEAVE PETITION ON THE MERITS OF THE CASE HAVE BEEN REJECTED BY THIS COURT. IT MAY ALSO BE OBSERVED THAT HAVING REGARD TO THE VERY HEAVY BACKLOG OF WORK IN THIS COURT AND TH E NECESSITY TO RESTRICT THE INTAKE OF FRESH CASES BY STRICTLY FOLLOWING THE CRITERIA AFOREMENTIONED, IT HAS VERY OFTEN BEEN THE PRACTICE OF THIS COURT NOT TO GRANT SPECIAL LEA VE EXCEPT IN CASES WHERE THE PARTY CANNOT CLAIM EFFECTIVE RELIEF BY APPROACHING THE CONCERNED HIGH COURT UNDER ARTICLE 226 OFTEN DISMISSED ONLY BY PASSING A NON-SPEAKING ORDE R ESPECIALLY IN VIEW OF THE RULINGS ALREADY GIVEN BY THIS COURT, IN THE TWO DECISIONS AFORECITED, THAT SUCH DISMISSAL O F THE SPECIAL LEAVE PETITION WILL NOT PRECLUDE THE PARTY FROM MOVING THE HIGH COURT FOR SEEKING RELIEF UNDER ARTICLE 226 OF THE CONSTITUTION. IN SUCH CASES, IT WOULD WORK EXTREME HARDSHIP AND REFUSE HIM RELIEF UNDER ARTICLE 226 OF THE CONS TITUTION ON THE SOLE GROUND OF DISMISSAL OF THE SPECIAL LEAVE P ETITION. IN OUR OPINION, WHAT HAS BEEN STATED BY THIS COURT APPLIES ALSO TO A CASE WHERE A SPECIAL LEAVE PETITION HAVIN G BEEN DISMISSED BY A NON-SPEAKING ORDER THE APPLICANT APP ROACHES THE HIGH COURT BY MOVING A PETITION FOR REVIEW. MAY BE THAT THE SUPREME COURT WAS NOT INCLINED TO EXERCISE ITS DISCRETIONARY JURISDICTION UNDER ARTICLE 136 PROBAB LY BECAUSE IT FELT THAT IT WAS SAID SPECIFICALLY IN THE ORDER DISMISSING THE SPECIAL LEAVE PETITION ONE IS LEFT MERELY GUESSING. WE DO NOT THINK IT WOULD BE JUST TO DEPRIVE THE AGGRIEVED PER SON OF THE STATUTORY RIGHT OF SEEKING RELIEF IN REVIEW JURISDI CTION OF THE HIGH COURT IF A CASE FOR RELIEF IN THAT JURISDICTIO N COULD BE MADE OUT MERELY BECAUSE A SPECIAL LEAVE PETITION UN DER ARTICLE 136 OF THE CONSTITUTION HAD ALREADY STOOD R EJECTED BY THE SUPREME COURT BY A NON-SPEAKING ORDER. 11. THE COURT TOTALLY AGREED WITH THE DECISION OF T WO JUDGES BENCH IN CASE OF V.M. SALGAOCAR AND BROS. PVT. LTD. VS. CIT [2000] 243 ITR 383 WHICH IS AS UNDER : WE MAY REFER TO A RECENT DECISION, BY A TWO-JUDGE BENCH OF THIS COURT IN V.M. SALGAOCAR AND BROS. PVT. LTD. V. CIT[2000] 243 ITR 383; [2000]97 FIR 192; [2000] 3 SCALE 240, HOLDING THAT WHEN A SPECIAL LEAVE PETITION IS DISMISSED, THIS CO URT DOES NOT COMMENT ON THE CORRECTNESS OR OTHERWISE OF THE ORDE R FROM WHICH LEAVE TO APPEAL IS SOUGHT. WHAT THE COURT MEA NS IS THAT IT DOES NOT CONSIDER IT TO BE A FIT CASE FOR EXERCI SING ITS JURISDICTION UNDER ARTICLE 136 OF THE CONSTITUTION. THAT CERTAINLY COULD NOT BE SO WHEN APPEAL IS DISMISSED THOUGHT BY A NON-SPEAKING ORDER. HERE THE DOCTRINE OF MERGE R APPLIES. IN THAT CASE, THE SUPREME COURT UPHOLDS TH E DECISION OF THE HIGH COURT OR OF THE TRIBUNAL. THIS DOCTRINE OF MERGER DOES NOT APPLY IN THE CASE OF DISMISSAL OF A SPECIA L LEAVE PETITION UNDER ARTICLE 136. WHEN AN APPEAL IS DISMI SSED, THE ORDER OF THE HIGH COURT MERGES WITH THAT OF THE SUP REME COURT. WE FIND OURSELVES IN ENTIRE AGREEMENT WITH T HE LAW SO STATED. WE ARE CLEAR IN OUR MIND THAT AN ORDER DISM ISSING A SPECIAL LEAVE PETITION, MORE SO WHEN IT IS BY A NON -SPEAKING ORDER, DOES NOT RESULT IN MERGER OF THE ORDER IMPUG NED INTO THE ORDER OF THE SUPREME COURT. THE ABOVE VERY CLEARLY SHOWS THAT EVEN IN THE DECISION QUOTED BY LD. COUNSEL FOR THE ASSESSEE I.E ; KUNHAYAMMED AND OTHERS VS. STATE OF KERALA AND ANOTHER(SUPRA) ALSO VERY CLEARLY HOLDS THAT IF AN S LP IS DISMISSED IN LEMINE THEN IT WOULD BEEN THAT COURT H AS NOT COMMENTED ON THE MERITS OF THE CASE BUT IT HAS MERE LY FOUND THE SAME NOT TO BE A FIT CASE FOR HEARING. 12. THE LD. COUNSEL HAS SPECIFICALLY REFERRED TO TH E CONCLUSION REACHED BY THE COURT WHICH ARE AS UNDER: (I) WHERE AN APPEAL OR REVISION IS PROVIDED AGAINST AN ORDER PASSED BY A COURT, TRIBUNAL OR ANY OTHER AUTH ORITY BEFORE A SUPERIOR FORUM AND SUCH SUPERIOR FORUM MOD IFIES, REVERSES OR AFFIRMS THE DECISION PUT IN ISSUE BEFOR E IT, THE DECISION BY THE SUBORDINATE FORUM MERGES IN THE DEC ISION BY THE SUPERIOR FORUM AND IT IS THE LATTER WHICH SUBSI STS, REMAINS OPERATIVE AND IS CAPABLE OF ENFORCEMENT IN THE EYE OF LAW. (II) THE JURISDICTION CONFERRED BY ARTICLE 136 OF THE CONSTITUTION IS DIVISIBLE INTO TWO STAGES. THE FIRS T STAGE IS UP TO THE DISPOSAL OF THE PRAYERS FOR SPECIAL LEAVE TO FI LE AN APPEAL. THE SECOND STAGE COMMENCES IF AND WHEN THE LEAVE TO APPEAL IS GRANTED AND THE SPECIAL LEAVE PETITION IS CONVERTED INTO AN APPEAL. (III) THE DOCTRINE OF MERGER IS NOT A DOCTRINE OF UNIVER SAL OR UNLIMITED APPLICATION. IT WILL DEPEND ON THE NATURE OF JURISDICTION EXERCISED BY THE SUPERIOR FORUM AND TH E CONTENT OR SUBJECT MATTER OF CHALLENGE LAID OR CAPABLE OF B EING LAID SHALL BE DETERMINATIVE OF THE APPLICABILITY OF MERG ER. THE SUPERIOR JURISDICTION SHOULD BE CAPABLE OF REVERSIN G, MODIFYING OR AFFIRMING THE ORDER PUT IN ISSUE BEFOR E IT. UNDER ARTICLE 136 OF THE CONSTITUTION, THE SUPREME COURT MAY REVERSE, MODIFY OR AFFIRM THE JUDGMENT DECREE OR OR DER APPEALED AGAINST WHILE EXERCISING ITS APPELLATE JUR ISDICTION AND NOT WHILE EXERCISING THE DISCRETIONARY JURISDIC TION DISPOSING OF A PETITION FOR SPECIAL LEAVE TO APPEAL . THE DOCTRINE OF MERGER CAN, THEREFORE, BE APPLIED TO TH E FORMER AND NOT TO THE LATTER. (IV) AN ORDER REFUSING SPECIAL LEAVE TO APPEAL MAY BE A NON-SPEAKING ORDER OR A SPEAKING ONE. IN EITHER CAS E IT DOES NOT ATTRACT THE DOCTRINE OF MERGER. AN ORDER REFUSI NG SPECIAL LEAVE TO APPEAL DOES NOT STAND SUBSTITUTED IN PLACE OF THE ORDER UNDER CHALLENGE. ALL THAT IT MEANS IS THAT TH E COURT WAS NOT INCLINED TO EXERCISE ITS DISCRETION SO AS TO AL LOW THE APPEAL BEING FILED. (V) IF THE ORDER REFUSING LEAVE TO APPEAL IS A SPEAKING ORDER, I.E., GIVES REASONS FOR REFUSING THE GRANT O F LEAVE, THEN THE ORDER HAS TWO IMPLICATIONS. FIRSTLY, THE STATEM ENT OF LAW CONTAINED IN THE ORDER IS A DECLARATION OF LAW BY T HE SUPREME COURT WITHIN THE MEANING OF ARTICLE 141 OF THE CONS TITUTION. SECONDLY, OTHER THAN THE DECLARATION OF LAW, WHATEV ER IS STATED IN THE ORDER ARE THE FINDINGS RECORDED BY TH E SUPREME COURT WHICH WOULD BIND THE PARTIES THERETO AND ALSO THE COURT, TRIBUNAL OR AUTHORITY IN ANY PROCEEDINGS SUB SEQUENT THERETO BY WAY OF JUDICIAL DISCIPLINE, THE SUPREME COURT BEING THE APEX COURT OF THE COUNTRY. BUT, THIS DOE S NOT AMOUNT TO SAYING THAT THE ORDER OF THE COURT, TRIBU NAL OR AUTHORITY BELOW HAS STOOD MERGED IN THE ORDER OF TH E SUPREME COURT REJECTING THE SPECIAL LEAVE PETITION OR THAT THE ORDER OF THE SUPREME COURT IS THE ONLY ORDER BINDIN G AS RES JUDICATA IN SUBSEQUENT PROCEEDINGS BETWEEN THE PART IES. (VI) ONCE LEAVE TO APPEAL HAS BEEN GRANTED AND THE APPELLATE JURISDICTION OF THE SUPREME COURT HAS BEE N INVOKED THE ORDER PASSED IN APPEAL WOULD ATTRACT THE DOCTRI NE OF MERGER; THE ORDER MAY BE REVERSAL, MODIFICATION OR MERELY AFFIRMATION. (VII) ON AN APPEAL HAVING BEEN PREFERRED OR A PETITION SEEKING LEAVE TO APPEAL HAVING BEEN CONVERTED INTO AN APPEAL BEFORE THE SUPREME COURT THE JURISDICTION OF THE HIGH COURT TO ENTERTAIN A REVIEW PETITION IS LOST THEREA FTER AS PROVIDED BY SUB-RULE(1) OF RULE 1 OF ORDER XLVII OF THE CODE OF CIVIL PROCEDURE. IN FACT HE HAS INVITED OUR ATTENTION TO CLAUSE (III ) OF THE ABOVE PORTION AND CLAUSE WERE CLEARLY SHOWS THAT THE HON BLE COURT CAN REVERSE, MODIFY OR AFFIRM THE JUDGMENT DECREE O R ORDER APPEALED, AGAINST WHILE EXERCISING ITS APPELLATE JU RISDICTION IN THAT CASE THE DOCTRINE OF MERGER WOULD APPLY WHILE EXERCISING THE DISCRETIONARY JURISDICTION IN DISPOSING OF A PE TITION FOR SPECIAL LEAVE TO APPEAL . WHEN SUPREME COURT PASSED AN NON SPEAKING ORDER THEN THAT WILL NOT LEAD TO MERGER. 13. FROM THE ABOVE IT BECOME ABSOLUTELY CLEAR THAT IF THE HONBLE SUPREME COURT WHILE CONSIDERING THE SLP DEC IDES AN ISSUE IN LEMINE THEN SUCH ORDER WOULD NOT LEAD TO T HE CONCLUSION THAT THE HONBLE COURT HAS CONSIDERED TH E MERITS OF THE CASE AND WOULD NOT LEAD TO MERGER OF SUCH ORDER WITH THE ORDER OF THE HIGH COURT. IN THE PRESENT CASE SLP FI LED BY THE REVENUE IN CASE OF CIT VS. M/S KRIBHCO IN INCOME TA X APPEAL NO. 444 OF 2011 THE FOLLOWING ORDER HAS BEEN PASSED : HEARD LEARNED SOLICITOR FOR INDIA DELAY CONDONED. THE SPECIAL LEAVE PETITION IS DISMISSED. THUS IT IS CLEAR THAT THE COURT HAS PASSED AN ORDER IN LEMINE AND DISMISSED THE SLP WHICH CANNOT LEAD TO THE CONCLUSI ON THAT THIS ORDER HAS MERGED WITH THE ORDER OF DELHI HIGH COURT . THEREFORE, WHEN AN ORDER OF THE JURISDICTIONAL HIGH COURT IS A VAILABLE IN THE CASE OF ASSESSEE WE HAVE NO OPTION BUT TO FOLLO W THE SAME. THEREFORE FOLLOWING THE ORDER OF THE HONBLE HIGH COURT IN ITA NO. 444 OF 2011 AND WE DECIDE THIS ISSUE AGA INST THE ASSESSEE. IT WAS ALSO CONTENDED THAT IN ANY CASE RU LE 8D HAS BECOME APPLICABLE FROM ASSESSMENT YEAR 2008-09 AND THEREFORE FOR COMPUTING THE DISALLOWANCE UNDER RULE 8D READ WITH SECTION 14-A, DISALLOWANCE SHOULD BE CALCULATE D AS PER THIS RULE. 14. WE FIND MERIT IN THIS CONTENTION AND THEREFORE SET ASIDE THE ORDER OF LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF AO FOR RE-COMPUTING THE DISALLOWANCE U/S 14-A READ WITH RULE 8P(2)(D). 15. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12/01/2015 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 12/01/2015 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR