ACIT CEN CIR 13, MUMBAI V. AFL LTD, MUMBAI

ITA 951/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70797 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 10-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Earning of tax free income; Onus to prove
• Section: 14A; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL'A' BENCH, MUMB AI .., !, '# '$ BEFORE SHRI I. P. BANSAL, J. M. AND SHRI SANJAY ARO RA, A. M. ./ I.T.A. NO.3123/MUM/2011 ( & ' (' & ' (' & ' (' & ' (' / / / / ASSESSMENT YEAR: 2008-09) AFL PRIVATE LIMITED AFL HOUSE, LOK BHARATI COMPLEX, MAROL MAROSHI ROAD, ANDHERI (E), MUMBAI-400 059 & & & & / VS. ASST. CIT, CENTRAL CIRCLE 13, MUMBAI ) '# ./ * ./ PAN/GIR NO. AABCA 2213 P ( )+ / APPELLANT ) : ( ,-)+ / RESPONDENT ) & ./ I.T.A. NO.951/MUM/2012 ( & ' (' & ' (' & ' (' & ' (' / / / / ASSESSMENT YEAR: 2008-09) DY. CIT, CENTRAL CIRCLE 13, ROOM NO.1006, 10 TH FLOOR, OLD CGO ANNEXE BLDG., MUMBAI 400 020 & && & / VS. AFL PVT. LTD. LOK BHARATI COMPLEX, MAROL MAROSHI ROAD, ANDHERI (E), MUMBAI-400 059 ) '# ./ * ./ PAN/GIR NO. AABCA 2213 P ( )+ / APPELLANT ) : ( ,-)+ / RESPONDENT ) & './ 0 1 ' / ASSESSEE BY : SHRI NITESH JOSHI & SHRI SUNIL JHUNJHUNWALA 0 1 ' / REVENUE BY : SHRI MANOJ KUMAR & 0 /2# / // / DATE OF HEARING : 18.06.2013 3 ( 0 /2# / DATE OF PRONOUNCEMENT : 14.08.2013 '4 / O R D E R 2 ITA NOS. 3123/M/2011 & 951/M/2012 (A.Y. 2008-09) AFL PVT. LTD. PER SANJAY ARORA, A. M.: THESE ARE A SET OF TWO APPEALS BY THE ASSESSEE AND THE REVENUE, I.E., DETERMINATION OF QUANTUM AND LEVY OF PENALTY FOR TH E ASSESSMENT YEAR (A.Y.) 2008-09 CONSEQUENT TO THE DISPOSAL OF ITS APPEALS FOR THE S AID YEAR BY THE COMMISSIONER OF INCOME TAX (APPEALS)-37, MUMBAI (CIT(A) FOR SHORT) VIDE HIS SEPARATE ORDERS IN THE RELEVANT PROCEEDINGS, BEING DATED 16.03.2011 AND 29.11.2011 FOR THE QUANTUM AND THE PENALTY PROCEEDINGS RESPECTIVELY. I.T.A. NO.3123/MUM/2011(BY THE ASSESSEE) 2.1 WE SHALL TAKE UP THE QUANTUM APPEAL, WHICH IS B Y THE ASSESSEE, FIRST. VIDE GROUND NO.1, THE ASSESSEE AGITATES THE CONFIRMATION OF THE DISALLOWANCE IN RESPECT OF CLEARING EXPENSES FOR RS.1,92,810/-. THE SAME STOOD CLAIMED AT A TOTAL OF RS.3,85,620/-. THE MODE OF PAYMENT WAS BOTH, I.E., BY WAY OF CASH AND BY CH EQUE. THE CASH PAYMENTS BEING NOT SUPPORTED BY THIRD PARTLY VOUCHERS, AND IN THE ABSE NCE OF THE ASSESSEE BEING ABLE TO SUBSTANTIATE ITS CLAIM OF THE EXPENSES BEING INCURR ED FOR AND ON BEHALF OF THE VARIOUS CUSTOMERS, SO THAT THE SAME IN FACT STOOD RECOVERED FROM THEM, THE ASSESSING OFFICER (A.O.) DISALLOWED THE ENTIRE SUM. 2.2 IN APPEAL, THE LD. CIT(A) FOUND THAT THIS WAS A SUBSISTING ISSUE IN THE ASSESSEES CASE. FOR A.YS. 2006-07 AND 2007-08, THE DISALLOWA NCE HAD BEEN RESTRICTED TO 50% OF THE CLAIMED EXPENSES ON THE SAME SET OF FACTS. ACCORDIN GLY, A DEVIATION IN DECISION WAS NOT PERMISSIBLE IN THE ABSENCE OF ANY CHANGE IN THE FAC TS. HE, ACCORDINGLY, DIRECTED FOR RESTRICTION OF THE DISALLOWANCE TO 50% OF THE CLAIM ED AMOUNT, I.E., AT THE IMPUGNED AMOUNT OF RS.1,92,810/-. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. NO IMPROVEMENT IN ITS CASE HAS BEEN BROUGHT OUT BY THE ASSESSEE-APPEL LANT, WHILE NO INFIRMITY IN THE IMPUGNED ORDER COULD BE POINTED OUT BY EITHER OF TH E PARTIES. ACCORDINGLY, WE FIND NO REASON TO INTERFERE WITH THE IMPUGNED ORDER; THE LD . CIT(A) HAVING TAKEN A REASONABLE 3 ITA NOS. 3123/M/2011 & 951/M/2012 (A.Y. 2008-09) AFL PVT. LTD. VIEW IN CONSISTENCE WITH THE PAST HISTORY OF THE CA SE. WE DECIDE ACCORDINGLY, AND THE ASSESSEES RELEVANT GROUND STANDS DISMISSED IN RESU LT. 4. GROUND NOS. 2 & 3 CONCERN THE DISALLOWANCE IN TH E SUM OF RS.47,34,478/- EFFECTED U/S.14A R/W R. 8D OF THE ACT. THE ASSESSEE, A COMPA NY IN THE LOGISTICS BUSINESS, RECEIVED DIVIDEND INCOME IN THE SUM OF RS.51,05,222/- FOR TH E RELEVANT YEAR. THE SAME BEING CLAIMED EXEMPT U/S. 10(34) OF THE ACT, THE ASSESSEE SUO MOTU DISALLOWED A SUM @ 10% THEREOF, I.E., RS.5,10,522/-, U/S.14A. AS NO BASIS FOR THE SAME, I.E., APART FROM A SIMILAR DISALLOWANCE HAVING BEEN SUSTAINED FOR THE PRECEDIN G YEAR/S, STOOD ADVANCED BY THE ASSESSEE, IN VIEW OF THE A.O. RULE 8D WOULD APPLY, THE DISALLOWANCE PER WHICH ADMITTEDLY WORKED TO AN AMOUNT OF RS.52.45 LACS. ACCORDINGLY, THE DIFFERENCE OF RS.47,34,478/- (RS.52,45,000 RS.5,10,522) STOOD DISALLOWED BY HI M. THE SAME STOOD CONFIRMED IN APPEAL ON PRINCIPALLY THE SAME BASIS. THE APPELLANT HAD NOT BEEN ABLE TO SUBSTANTIATE ITS CLAIM QUA THE AMOUNT DISALLOWABLE U/S.14A AT RS.5,10,522/- I N ANY MANNER. NO BIFURCATION OF THE SAID AMOUNT STOOD SUBMITTED, AND NEITHER WAS IT ABLE TO ESTABLISH THE NEXUS BETWEEN THE INTEREST BEARING BORROWINGS AND I TS UTILIZATION FOR BUSINESS PURPOSES, SO THAT THE PRESCRIPTION OF R. 8D(2)(II), ON THE PR ESUMPTION OF THE INVESTMENT HAVING BEEN MADE FROM THE COMMON HOTCHPOTCH OF FUNDS, WOULD OBT AIN. THE ONUS TO PROVE THAT THE EXPENSES AS CLAIMED WERE NOT INCURRED IN RELATION T O THE EARNING TAX EXEMPT INCOME, I.E., AS CLAIMED, IS ON THE ASSESSEE, AND WHICH IT COULD NOT. UNDER THE CIRCUMSTANCES, THE A.O. BEING NOT SATISFIED WITH THE CORRECTNESS OF THE SAI D CLAIM, PROCEEDED TO ESTIMATE THE DISALLOWANCE BY INVOKING RULE 8D. THE SAME IS CONSI STENT WITH THE DECISION IN THE CASE OF GODREJ & BOYCE MANUFACTURING COMPANY LTD. VS. DY. C IT REPORTED IN [2010] 328 ITR 81 (BOM), WHICH ALSO CONSIDERS THE ARGUMENT OF THE INT EREST CLAIMED BEING ALLOWABLE U/S. 36(1)(III), AS ALSO ADVANCED BY THE ASSESSEE BEFORE HIM, SO THAT THE DISALLOWANCE AS MADE WAS, UNDER THE GIVEN FACTS AND CIRCUMSTANCES, IN AC CORDANCE WITH LAW. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 4 ITA NOS. 3123/M/2011 & 951/M/2012 (A.Y. 2008-09) AFL PVT. LTD. 5.1 BEFORE US, THE LD. AR QUESTIONED THE VERY BASIS OF THE IMPUGNED DISALLOWANCE INASMUCH AS THE ASSESSEE HAD ITSELF DISALLOWED 10% OF THE DIVIDEND INCOME IN CONSISTENCE WITH THE PAST ASSESSMENTS. PLACING THE COPIES OF TH E ORDERS BY THE TRIBUNAL FOR THE PRECEDING YEARS ON RECORD, HE WOULD SUBMIT THAT WHI LE FOR A.Y. 2005-06 (IN ITA NO.6697/MUM/2008) A DISALLOWANCE OF 5% (OF DIVIDEND ) WAS CONFIRMED BY THE TRIBUNAL, THE SAME WAS CONSIDERED REASONABLE AT 10% FOR THE S UBSEQUENT YEARS, I.E., A.YS. 2006-07 AND 2007-08. THE ASSESSEE HAVING FOLLOWED THE SAME PERCENTAGE FO R THE CURRENT YEAR, HOW COULD THE SAME BE NOW CONSIDERED NOT REASONABLE AND, THEREFORE, UNACCEPTABLE ? MERELY BECAUSE A HIGHER AMOUNT IS WORKABLE UNDER RU LE 8D, DOES NOT IMPLY THAT A DISALLOWANCE WITH REFERENCE THERETO HAD TO BE MANDA TORILY MADE. THE A.O. HAS TO FIRST RECORD HIS NON-SATISFACTION WITH THE ASSESSEES CLA IM FOR DISALLOWANCE, BE IT IN A POSITIVE SUM, AS IN THE INSTANT CASE, OR EVEN AT NIL AMOUNT, BEFORE HE COULD PROCEED TO DISTURB THE SAME THE ASSESSEES ESTIMATE AND APPLY RULE 8D. THE SAID NON-SATISFACTION, AS EXPLAINED BY THE HIGHER COURTS OF LAW, VIZ. MAXOPP INVESTMENT LTD. VS. CIT [2012] 347 ITR 272 (DELHI) AND GODREJ & BOYCE (SUPRA), HAS TO BE FOR COGENT REASONS. NO DISSATISFACTION HAVING BEEN RECORDED BY THE A.O. IN TERMS OF SECTION 14A(2), MUCH LESS STATING COGENT REASONS, THE IMPUGNED DISALLOWANCE C OULD NOT STAND, AS WAS ALSO FOUND BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN J. K. INVESTORS (BOMBAY) LTD. VS. ACIT (OSD) (IN ITA NO.7858/MUM/2011 DATED 13.03.2013). THE DISSATI SFACTION OF THE A.O. CANNOT BE INFERRED, AS WAS DONE BY THE LD. CIT(A) IN THE INST ANT CASE. THE SAME CONSTITUTES A FUNDAMENTAL FLAW, SO THAT THE MATTER COULD NOT BE R EMITTED BACK TO THE ASSESSING AUTHORITY, FOR WHICH HE WOULD REFER TO PG.290 OF THE DECISION IN THE CASE OF MAXOPP INVESTMENT LTD. (SUPRA). 5.2 THE LD. DR, ON THE OTHER HAND, WOULD SUBMIT THA T THE VERY FACT THAT THE ASSESSEE HAD MADE AN AD HOC DISALLOWANCE OF A PART OF ITS DIVIDEND INCOME, WOU LD BE SUFFICIENT TO EXHIBIT THAT IT HAD NO OBJECTIVE BASIS FOR MAKING T HE CLAIM OF EXPENDITURE STATED TO HAVE BEEN INCURRED IN RELATION THERETO, I.E., TO INCOME NOT FORMING PART OF THE TOTAL INCOME. THE DISALLOWANCE OF THE EXPENDITURE, TO WHICH THERE IS NO REFERENCE BY THE ASSESSEE, MUCH LESS 5 ITA NOS. 3123/M/2011 & 951/M/2012 (A.Y. 2008-09) AFL PVT. LTD. AS TO HOW THE SAME HAS BEEN IDENTIFIED AND QUANTIFI ED, WOULD BE OF NO ASSISTANCE TO THE ASSESSEE . IT IS UNDER THESE CIRCUMSTANCES THAT THE A.O. PROCE EDED TO DETERMINE THE DISALLOWANCE IN TERMS OF THE METHOD PRESCRIBED BY L AW, I.E., RULE 8D, WHICH HAS BEEN HELD AS BOTH CONSTITUTIONAL AND REASONABLE BY THE HON'B LE JURISDICTIONAL HIGH COURT IN GODREJ & BOYCE (SUPRA). IN ANY CASE OF THE MATTER, THE LD. CIT(A) HAS DISCUSSED THE MATTER IN SUFFICIENT DETAIL, STATING THAT THE INITIAL ONUS TO PROVE THAT NO EXPENDITURE, OR TO THE EXTENT CLAIMED ONLY, AS THE CASE MAY BE, STANDS INCURRED I N RESPECT OF SUCH INCOME, IS ON THE ASSESSEE, WHICH HAS NOT BEEN DISCHARGED, WITH IT EV EN FALLING BEFORE HIM TO SUPPORT ITS CLAIM IN ANY MANNER. 5.3 IN REJOINDER, IT WAS SUBMITTED BY THE LD. AR TH AT ONCE THE LAW OBLIGES THE A.O. TO DO A PARTICULAR THING OR ACT, IT IS ONLY HE WHO COU LD DO SO IN LAW, AND THE FIRST APPELLATE AUTHORITY CANNOT STEP INTO HIS SHOES. TOWARD THIS, RELIANCE WAS PLACED BY HIM ON THE DECISIONS IN THE CASE OF M.V. KIBE VS. COMMISSIONER OF WEALTH-TAX [1988] 169 ITR 40 (AP), M.V. KIBE VS. COMMISSIONER OF WEALTH-TAX [1987] 168 ITR 82 (MP) AND RATTAN CHAND & SONS VS. WEALTH-TAX OFFICER [1983] 5 ITD 508 (CHD.). 6. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 6.1 AS WOULD BE EVIDENT FROM THE FOREGOING, WHILE T HE ASSESSEE MAKES OUT A LEGAL CLAIM, I.E., QUA THE NON-MAINTAINABILITY OF THE DISALLOWANCE IN THE ABSENCE OF THE A.O. HAVING NOT IMPUGNED ITS SUO MOTU DISALLOWANCE WITH COGENT REASONS, THE REVENUE BASE S ITS CASE ON FACTS, I.E., OF THE ASSESSEES SUO MOTU DISALLOWANCE BEING NOT VALID, SO THAT THE SAME COULD NOT BE ACCEPTED. 6.2 THE FIRST QUESTION BEFORE US IS AS TO THE NATUR E OF THE OBLIGATION CAST ON THE A.O. U/S. 14A(2) R.W.S. 14A(3), WHICH READS AS UNDER: EXPENDITURE INCURRED IN RELATION TO INCOME NOT INC LUDIBLE IN TOTAL INCOME. 14A. (1) FOR THE PURPOSES OF COMPUTING THE TOTAL INCOME UNDER THIS CHAPTER, NO DEDUCTION SHALL BE ALLOWED IN RESPECT O F EXPENDITURE 6 ITA NOS. 3123/M/2011 & 951/M/2012 (A.Y. 2008-09) AFL PVT. LTD. INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHIC H DOES NOT FORM PART OF THE TOTAL INCOME UNDER THIS ACT. (2) THE ASSESSING OFFICER SHALL DETERMINE THE AMOUN T OF EXPENDITURE INCURRED IN RELATION TO SUCH INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THIS ACT IN ACCORDANCE WITH SUCH METHO D AS MAY BE PRESCRIBED, IF THE ASSESSING OFFICER, HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE, IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF SUCH EXPENDITURE IN RELATION TO INCOME W HICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THIS ACT. (3) THE PROVISIONS OF SUB-SECTION (2) SHALL ALSO AP PLY IN RELATION TO A CASE 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 THIS ACT: PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL EMPOWE R THE ASSESSING OFFICER EITHER TO REASSESS UNDER SECTION 147 OR PASS AN ORDER ENHANCING THE ASSESSMENT OR REDUCING A REFUND ALREA DY MADE OR OTHERWISE INCREASING THE LIABILITY OF THE ASSESSEE UNDER SECT ION 154, FOR ANY ASSESSMENT YEAR BEGINNING ON OR BEFORE THE 1ST DAY OF APRIL, 2001. THE OBLIGATION AFORESAID HAS BEEN SUBJECT TO JUDIC IAL REVIEW, AS BY THE HON'BLE JURISDICTIONAL HIGH COURT IN GODREJ & BOYCE (SUPRA), HOLDING AS UNDER: (PG.109) THE SATISFACTION ENVISAGED BY SUB-SECTION (2) OF S ECTION 14A IS AN OBJECTIVE SATISFACTION THAT HAS TO BE ARRIVED AT BY THE ASSESSING OFFICER HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE. THE SAFEGUARD INTRODUCED BY SUB-SECTION (2) OF SECTION 14A FOR A FAIR AND REASO NABLE EXERCISE OF POWER BY THE ASSESSING OFFICER, CONDITIONED AS IT IS BY T HE REQUIREMENT OF AN OBJECTIVE SATISFACTION, MUST, THEREFORE, BE SCRUPUL OUSLY OBSERVED. AN OBJECTIVE SATISFACTION CONTEMPLATES A NOTICE TO THE ASSESSEE, AN OPPORTUNITY TO THE ASSESSEE TO PLACE ON RECORD ALL THE RELEVANT FACTS INCLUDING HIS ACCOUNTS AND RECORDING OF REASONS BY THE ASSESSING OFFICER IN THE EVENT HE COMES TO THE CONCLUSION THAT HE IS NOT SATISFIED WI TH THE CLAIM OF THE ASSESSEE. 6.3 IT IS, THEREFORE, CLEAR THAT THE INITIAL ONUS, EVEN AS STATED BY THE LD. CIT(A), TO MAKE A CLAIM IN RESPECT OF THE EXPENDITURE INCURRED IN R ELATION TO THE INCOME THAT DOES NOT FORM PART OF THE TOTAL INCOME, IS ON THE ASSESSEE. ONCE THE ASSESSEE MAKES SUCH A CLAIM WITH REFERENCE TO ITS ACCOUNTS, THE A.O. IS BOUND TO EXA MINE THE SAME FOR THE PURPOSE OF SATISFYING HIMSELF WITH REGARD TO ITS CORRECTNESS O R OTHERWISE, AND WHERE NOT SATISFIED, 7 ITA NOS. 3123/M/2011 & 951/M/2012 (A.Y. 2008-09) AFL PVT. LTD. DETERMINE THE SAME IN ACCORDANCE WITH THE PRESCRIBE D METHOD. FURTHER, THEREFORE, THOUGH THERE IS NO SPECIFIC REQUIREMENT OF RECORDING DISSA TISFACTION, IT IS INCUMBENT ON A.O. TO DO SO, AS IN ITS ABSENCE IT CANNOT BE ASCERTAINED IF H E HAD ACTUALLY EXAMINED THE ASSESSEES CLAIM OR PROCEEDED MECHANICALLY. TWO, HIS ORDER BEI NG APPEALABLE, IT IS ONLY WHERE IT BEARS HIS REASONS, COULD THE VALIDITY THEREOF AND, THUS, OF HIS ACTION OF DISALLOWANCE U/R. 8D, BE SUBJECT TO JUDICIAL REVIEW. IT IS IN THIS CO NTEXT THAT IT HAS BEEN HELD THAT THE SAID DISSATISFACTION HAS TO BE EXPLICIT AND INFORMED. TH E SAME, THUS, IS NOT A JURISDICTIONAL REQUIREMENT, BUT TOWARD COMPLETING THE INBUILT FAIR NESS OF THE PROCEDURE AS PROVIDED FOR. THE REQUIREMENT OF RECORDING DISSATISFACTION PREDIC ATES ON THE DISCHARGE OF THE ONUS CAST ON THE ASSESSEE, AND WHICH MAY NOT ALWAYS OBTAIN. T HE REVENUE ON ITS PART COULD ONLY EXTEND OPPORTUNITY TO THE ASSESSEE FOR THE DISCHARG E OF THE SAID ONUS. IN A PARTICULAR CASE, THE ASSESSEE MAY NOT PRODUCE THE ACCOUNTS. HOW COULD THE A.O. POSSIBLY VERIFY THE CORRECTNESS OF THE ASSESSEES CLAIM IN SUCH A CASE? IN ANOTHER, THE ASSESSEE DOES NOT STATE THE BASIS OF ITS CLAIM OR MAKES THE SAME DE HORS THE EXPENSES INCURRED AND CLAIMED. THE A.O. COULD NOT POSSIBLY VERIFY THE CORRECTNESS OF S UCH AN INCOHERENT OR INFIRM CLAIM. TRUE, HE SHOULD STATE THIS IN AS MANY WORDS, BUT TH EN, COULD ONE SAY THAT HIS ACTION FAILS FOR WANT THEREOF WHERE HIS DISSATISFACTION OTHERWIS E FLOWS FROM THE FACTUAL MATRIX OF THE CASE OR IS OTHERWISE PATENT OR SELF-EVIDENT. THE CL AIM (TOWARD DISALLOWANCE), IT NEEDS TO BE APPRECIATED, IS A MATTER OF FACT, AND SO, CONSEQ UENTIALLY, IS ITS VERIFICATION. THE DECISION AS REGARDS ITS CORRECTNESS OR OTHERWISE THUS IS ESS ENTIALLY AN ISSUE WHICH TURNS ON FACTS . THE LAW POSTULATES A DISALLOWANCE ON THE ASSESSEES PART, AND FAIRNESS OR PROCEDURE REQUIRES INFORMING THE BASIS OF THE ADJUSTMENT, SO AS TO ENABLE THE ASSESSEE TO MEET IT WHERE THE A.O. DOES NOT ACCEPT THE ASSESSEES ESTIM ATE. AS LONG AS THESE INGREDIENTS ARE SATISFIED, OR ALTERNATIVELY INCAPABLE OF BEING SO, THE A.O.S ACTION IN EFFECTING THE DISALLOWANCE UNDER RULE 8D CANNOT BE ASSAILED. 6.4 COMING TO THE FACTS OF THE CASE, THE ASSESSEES CLAIM IS WITHOUT REFERENCE TO THE EXPENSES INCURRED AND CLAIMED, MUCH LESS AS TO WHIC H EXPENDITURE IS INCLUDED AND TO WHAT EXTENT. THERE IS NO BREAK-UP OF THE EXPENDITUR E DISALLOWED INTO DIRECT OR INDIRECT 8 ITA NOS. 3123/M/2011 & 951/M/2012 (A.Y. 2008-09) AFL PVT. LTD. EXPENDITURE. THERE IS, FURTHER, NO INDICATION OF IN TEREST, IF ANY, INCLUDED THEREIN, AND WHICH COULD BE BOTH IN THE FORM OF DIRECT AND/OR IN DIRECT EXPENDITURE. WHEN QUESTIONED IN ITS RESPECT IN THE ASSESSMENT PROCEEDINGS, ALL T HAT THE ASSESSEE IN EFFECT DOES IS TO FURNISH A WORKING OF THE DISALLOWANCE UNDER R.8D (R EFER PARA 4.2 OF THE ASSESSMENT ORDER), FURTHER MAKING THE FOLLOWING CLAIMS (REFER ASSESSEE S LETTER DATED DEC, 2010 / PB PGS. 17- 25): 1) MAJOR SHARE HOLDING IS IN SHARES OF SUBSIDIARY AND GROUP COMPANIES; 2) AN INVESTMENT IN MUTUAL FUND DURING THE YEAR IS FIN ANCED BY SALE OF SHARES OF A COMPANY, TO WHICH THE TRAVEL DIVISION HAD BEEN SOLD , RECEIVING SHARES IN PART CONSIDERATION, SO THAT NO CASH FLOW OF THE COMPANY HAD BEEN USED; 3) THE NUMBER OF TRANSACTIONS OF PURCHASE AND SALE (I. E., IN SHARES & UNITS) DURING THE YEAR IS VERY NOMINAL; 4) THE INTEREST CLAIMED IS ALLOWABLE U/S.36(1)(III); A ND 5) THE DISALLOWANCE AT 10% OF THE DIVIDEND WAS ACCEPTE D IN ASSESSMENT PROCEEDINGS U/S.143(3) FOR A.Y. 2007-08. THERE BEING, THEREFORE, ADMITTEDLY NO EXPLANATION O N FACTS, I.E., QUA THE EXPENDITURE CLAIMED TO BE INCURRED IN RELATION TO T HE TAX-FREE INCOME; THE ASSESSEE ITSELF HAVING MADE AN AD HOC CLAIM; RATHER, AS IT APPEARS, EXCLUSIVE OF THE INTE REST COMPONENT, BEING ALLOWABLE U/S. 36(1)(III), HOW COULD ONE MAY ASK, AS ALSO STATED EARLIER, THE A.O. POSSIBLY VERIFY THE CORRECTNESS OF SUCH A CLAIM, I. E., MADE DE HORS THE ACCOUNTS AND THE EXPENDITURE BEING CLAIMED AS INCURRED. THIS IS PRECISELY WHAT THE LD. CIT(A) EXPLAINS VIDE PARA 3.3.1 OF HIS ORDER, BEFORE WHOM ALSO THE ASSES SEE DOES NOT SUBSTANTIATE ITS CLAIM ON FACTS IN ANY MANNER . 6.5 AS REGARDS THE ASSESSEES CLAIM WITH REFERENCE TO THE DEDUCTIBILITY OF INTEREST U/S.36(1)(III), THE SAME IS MET BY THE LD.CIT(A) WI TH REFERENCE TO THE DECISION IN GODREJ & BOYCE (SUPRA); THE SAID ASPECT OR CONTENTION, ALSO RAISE D IN THAT CASE, HAVING BEEN CONSIDERED BY THE HONBLE COURT (REFER PARA 3.3.3 O F THE IMPUGNED ORDER). IT EXPLAINS, WITH REFERENCE TO THE RELIANCE BY THE ASSESSEE-APPELLANT ON THE DECISION, INTER ALIA , IN CIT VS. RELIANCE UTILITIES & POWER LTD. [2009] 313 ITR 340 (BOM), THAT THE FACT THAT THE 9 ITA NOS. 3123/M/2011 & 951/M/2012 (A.Y. 2008-09) AFL PVT. LTD. INVESTMENTS (YIELDING TAX-FREE INCOME) STOOD MADE B Y UTILIZING OWN FUNDS WOULD NO LONGER, I.E., AFTER COOPTION OF SECTION 14A ON THE STATUTE-BOOK, BE DISPOSITIVE OF THE QUESTION AS TO WHETHER THE ASSESSEE HAD INCURRED AN Y EXPENDITURE IN RELATION TO THE INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME, AND T HAT THE DISALLOWANCE OF INTEREST EXPENDITURE WOULD HAVE TO BE MADE, WHICH IS WHAT TH E A.O. IS TO DETERMINE (PARA 85,86/PGS.135-137). THIS ASPECT STANDS ALSO CLARIFI ED BY THE TRIBUNAL IN THE CASE OF DY. CIT VS. DAMANI ESTATES & FINANCE PVT. LTD. (IN ITA NO.3029/MUM/2012 DATED 17.07.2013/ REFER PARA 5.4). IN OTHER WORDS, AS ALS O STATED BY THE LD. CIT(A), THE ONUS IS ON THE ASSESSEE, AND UNLESS IT IS ABLE TO SHOW THAT THE BORROWED FUNDS HAVE BEEN UTILIZED FOR SPECIFIED PURPOSES, AS IN THE CASE OF DEDICATED FUNDS, VIZ. TERM LOANS, WORKING CAPITAL ADVANCES, ETC., THE GENERAL POOL OF FUNDS HYPOTHESI S SHALL PREVAIL, AND THE DISALLOWANCE OF THE INTEREST TO THE PROPORTIONATE EXTENT, ENSUE. RE FERENCE IN THIS CONTEXT IS ALSO MADE TO THE DECISION IN THE CASE OF HERCULES HOISTS LTD. VS. ASST. CIT [2013] 22 ITR (TRIB) 527 (MUM) (PARA 48, AT PG. 563 & 564 OF THE REPORTS). T HE MATTER IS PRINCIPALLY FACTUAL, TO BE DECIDED ON THE FACTS AS LED BY THE ASSESSEE. IT IS ONLY IN THAT CIRCUMSTANCE, WHETHER THE ASSESSEE CLAIMS THE EXPENDITURE LIABLE TO BE DISALL OWED U/S.14A TO BE AT NIL OR IN A POSITIVE SUM, THAT THE A.O. IS OBLIGED, NAY, DUTY B OUND, UNDER LAW TO VERIFY THE CORRECTNESS OF THE ASSESSEES SAID CLAIM. THE DECISIONS IN THE CASE OF MAXOPP INVESTMENT LTD. (SUPRA) & GODREJ & BOYCE (SUPRA) , CLARIFYING ON THIS ASPECT OF THE MATTER, AND ON WHICH THERE IS NO, NOR COULD BE, ANY QUARREL OR DIF FERENCE, ARE PREMISED ON THE ASSUMPTION OF THE ASSESSEE MAKING A PROPER CLAIM U/ S. 14A, I.E., AS ENVISAGED PER THE SAID SECTION, IMPLYING BEING SUPPORTED BY FACTS AND FIGU RES, AND NOT A BALD CLAIM, WITHOUT REFERENCE TO ITS ACCOUNTS AND THE EXPENDITURE INCUR RED AND CLAIMED, SO THAT IT IS INCAPABLE OF BEING VERIFIED . 6.6 THE ONLY BASIS OF THE ASSESSEES CLAIM IN THE I NSTANT CASE, I.E., AT 10% OF THE DIVIDEND INCOME, IS THAT THE SAME FOUND ACCEPTANCE BY THE REVENUE FOR A.Y. 2007-08. THE CLAIM, NOTWITHSTANDING ITS ACCEPTANCE FOR THAT YEAR AND, IN FACT, EVEN FOR THE EARLIER YEARS, IS FUNDAMENTALLY FLAWED. SECTION 14A IS QUA DISALLOWANCE OF EXPENDITURE, AND 10 ITA NOS. 3123/M/2011 & 951/M/2012 (A.Y. 2008-09) AFL PVT. LTD. WHICH IS PER SE INDEPENDENT OF INCOME. THERE IS, THEREFORE, NO BAS IS TO SAY, AND WHICH IS SAID DE HORS THE EXPENDITURE INCURRED, THAT THE EXPENDITURE CLA IMED FOR THE RELEVANT YEAR IN RELATION TO THE INCOME THAT DOES NOT FORM PART O F THE TOTAL INCOME, IS AT 90% OF SUCH INCOME FOR THAT YEAR. THE EXPENDITURE IS INCURRED F OR THE PURPOSE OF EARNING INCOME, BUT BY ITSELF DOES NOT GUARANTEE INCOME, MUCH LESS GENE RATE IT IN A PRE-DEFINED RATIO (AS AT 10/9 AS CLAIMED IN THE INSTANT CASE). AS SUCH, EXCE PT IN SITUATIONS WHERE INCOME ARISES CONTRACTUALLY AT A SPECIFIED PERCENTAGE OF THE COST S, OR SPECIFIED COSTS, THE DYNAMICS, IMPERATIVES AND DETERMINANTS OF INCOME ARE DIFFEREN T. THE EXPENSES ONLY MEASURE THE COST IN FINANCIAL TERMS OF THE INPUTS MADE FOR THE PURPOSE OF GENERATING OUTPUT OR REVENUE. FOR EXAMPLE, GOODS ARE PRODUCED, INCURRING ALL THE RELEVANT COSTS, WHICH HOWEVER ARE FOUND DEFECTIVE OR NOT MEETING THE SPECIFIED QUALIT Y STANDARDS, SO THAT THE SAME (GOODS) HAVE TO BE DISCARDED/SCRAPPED. THE EXPENDITURE STAN DS INCURRED, AND IS ALLOWABLE, EVEN AS NO INCOME IS GENERATED. THE FUNDS ARE BORROWED TO B UY SHARES AND, ACCORDINGLY, INTEREST EXPENDITURE IS INCURRED. BUT COULD ONE SAY AS TO HO W MUCH INCOME, WHETHER ON SALE OF SHARES SUBSEQUENTLY OR BY WAY OF DIVIDEND INCOME TH EREON, WOULD ARISE? PRE-DETERMINING OR LIMITING THE EXPENDITURE WITH REFERENCE TO INCOM E, IF ANY, FINALLY EARNED, IS MISCONCEIVED AND NOTIONAL. THIS ASPECT STANDS EXPL AINED AT LENGTH BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF CHEMINVEST LTD. V. ITO [2009] 121 ITD 318 (DEL) (SB). AND TO THINK THAT IT IS THIS INHERENTLY ERRONEOUS AND F LAWED CLAIM, WITHOUT ANY BASIS IN LAW OR FACT, THAT THE ASSESSEE SEEKS THE A.O.S VERIFICATI ON ON, IMPUGNING HIS DISSATISFACTION ON THE GROUND OF NOT BEING EXPLICIT OR BASED ON COGENT REASONS ! NOT ONLY THAT, IT, ON THE SAME BEING POINTED OUT BY THE FIRST APPELLATE AUTHO RITY, RATHER THAN ANSWERING THOSE OBJECTIONS ON MERITS, QUESTIONS THE LEGALITY THEREO F ON THE GROUND OF COMPETENCE. SO MUCH FOR LEGAL INGENUITY. WE CAN UNDERSTAND THE ASS ESSEE HAVING MADE OUT A CASE, I.E., ON A FACTUAL BASIS, BEFORE THE LD. CIT(A), AND WHIC H STANDS MET BY HIM RATHER THAN REQUIRING THE A.O. TO EXAMINE THE SAME FIRST. HOWEV ER, IN THE ABSENCE OF ANY FACTUAL BASIS TO THE ASSESSEES CLAIM, WHICH POSITION CONTINUES B EFORE US, THE ASSESSEES CLAIM WOULD NOT IN FACT EVEN QUALIFY TO BE TERMED AS ONE, MUCH LESS ONE WHICH IS TO BE SUBJECT TO THE PROCEDURE AS LAID DOWN U/S.14A(2). THAT THE SAME ST OOD ACCEPTED FOR ANOTHER YEAR, EVEN 11 ITA NOS. 3123/M/2011 & 951/M/2012 (A.Y. 2008-09) AFL PVT. LTD. BY THE TRIBUNAL, WOULD NOT DETRACT FROM THE MERITS OF THE CASE FOR THE CURRENT YEAR. PUT DIFFERENTLY, IT IS ONLY THE ACTION FOR THOSE YEARS, I.E., IF AT ALL, THAT IS NOT CONSISTENT WITH THE LAW, SO THAT NO BENEFIT THERE-FROM COULD BE DERIVED BY THE ASSESSEE. AS EXPLAINED IN GODREJ & BOYCE (SUPRA), FAILURE TO CONSIDER THE APPLICABILITY OF SECTION 14A IN ITS PROPER PERSPECTIVE WOULD NOT BAR THE AUTHORITIES FROM SO C ONSIDERING THE SAME FOR ANY OTHER, LATER YEAR. ALSO, THE PRESCRIPTION OF A METHOD (PER RULE 8D - WHICH IS EFFECTIVE FROM THE CURRENT YEAR), TO BE UNIFORMLY APPLIED, REMOVING IT FROM THE REALM OF SUBJECTIVE SATISFACTION AND DISCRETION OF THE ASSESSING AUTHOR ITY, EXCEPT OF-COURSE WHERE THE ASSESSEE MAKES OUT A CASE WITH REFERENCE TO ITS ACCOUNTS, I. E., ON FACTS, INFORMING AN OBJECTIVE BASIS, IN WHICH CASE IT WOULD PREVAIL, I.E., IF COR RECT, EFFECTIVELY GIVES A FIRM AND DEFINITE COURSE TO BE FOLLOWED, THEREBY CHANGING THE DISCOUR SE BY INTRODUCING THE CONCEPT OF STATUTORY DISALLOWANCE. NO DOUBT IT STANDS EXPLAINE D THAT SECTION 14A REPRESENTS THE FIRST SERIOUS ATTEMPT BY THE PARLIAMENT TO ADDRESS THE IS SUE OF APPORTIONMENT OF EXPENSES BETWEEN TAXABLE AND NON-TAXABLE INCOMES ARISING FRO M A COMPOSITE BUSINESS. AND, FURTHER, THAT THE THEORY OF APPORTIONMENT STANDS WI DENED BY THE INTRODUCTION OF SECTION 14A. THE SAME, SUBJECT TO THE CAVEAT PROVIDED THERE IN, WOULD APPLY. THE STATED OBJECTION HAS BEEN FOUND BY US AS NOT OBTAINING FOR THE CURRE NT YEAR. THE DECISION IN THE CASE OF MAXOPP INVESTMENT LTD. (SUPRA) AS WELL AS IN THE CASE OF GODREJ & BOYCE (SUPRA), EXPLAINS THE POSITION OF THE LAW, ON WHICH, AS AFOR ESAID, THERE IS NO DISPUTE. THE SAME POSITS ON THE ASSESSEES CLAIM BEING BASED ON FACTS . THE ORDER OF THE TRIBUNAL IN THE CASE OF J. K. INVESTORS (BOMBAY) LTD. (SUPRA) IS AGAIN WITHOUT REFERENCE TO AND DE HORS THE FACTS OF THAT CASE, AND SOLELY ON THE BASIS OF THE LEGAL POSITION, AND ON WHICH THERE IS NO QUARREL. IN THE ABSENCE OF ANY REFERENCE TO FACTS, THE ONLY INFERENCE WOULD BE OF THE LEGAL VALIDITY OF THE ASSESSEES CLAIM U/S.14A, WHICH WE HAVE FOUND AS NOT SO IN THE INSTANT CASE, AS ALSO BY THE LD. CIT(A). 6.7 SO HOWEVER, A MERE BROWSE OF THE ASSESSEES BAL ANCE-SHEET FOR THE RELEVANT YEAR- END (PB PGS.4-16), REVEALS TERM LOANS (FROM BANKS) AT RS.2864.87 LACS AND WORKING CAPITAL ADVANCES (FROM BANKS) AT RS.1401.12 LACS. T HE CORRESPONDING YEAR-END BALANCES 12 ITA NOS. 3123/M/2011 & 951/M/2012 (A.Y. 2008-09) AFL PVT. LTD. OF FIXED ASSETS (NET OF DEPRECIATION) AND NET CURRE NT ASSETS ARE AT RS.5237.52 LACS AND RS.3328.29 LACS RESPECTIVELY, SIGNIFYING COMPLETE A BSORPTION OF THE BORROWED FUNDS FOR THE SPECIFIED PURPOSES, I.E., FOR WHICH THEY STAND CONTRACTUALLY AVAILED. THE ASSESSEE, THEREFORE, IN OUR VIEW, HAS A STRONG PRIMA FACIE CASE OF ENTIRE BANK BORROWINGS BEING APPLIED FOR THE RESPECTIVE PURPOSES, SO THAT NO PAR T THEREOF COULD BE SAID TO HAVE BEEN INVESTED IN RELEVANT SECURITIES YIELDING TAX-FREE I NCOME. IF SO, NO PART OF THE INTEREST EXPENDITURE THEREON COULD BE ATTRIBUTED TO THE SAID INVESTMENTS ON THE ASSUMPTION OF THE SAME COMPRISING THE GENERAL POOL OF FUNDS. THE MATT ER, ACCORDINGLY, IS TO BE RESTORED TO THE FILE OF THE A.O., WHO SHALL CONFIRM THE UTILIZA TION OF THE BORROWED FUNDS FOR THE SPECIFIED PURPOSES FOR THE ENTIRE YEAR, RETURNING A FINDING IN THE MATTER. WHERE SO, THE PROPORTIONATE FORMULA WOULD APPLY BY EXCLUDING THE CORRESPONDING ASSETS. AS SUCH, IF AN ASSET OF RS.100/- IS FINANCED BY BANK BORROWINGS TO THE EXTENT OF RS.75/-, ASSETS TO THAT EXTENT (RS.100/-) WOULD STAND EXCLUDED IN COMPUTING THE PROPORTIONATE FORMULA UNDER RULE 8D; THE FINANCING OF THE SAID ASSET HAVING BEE N ESTABLISHED. 7. IN OUR CLEAR VIEW, THEREFORE, THE INITIAL ONUS T O STATE ITS CASE QUA THE CLAIMED DISALLOWANCE U/S.14A IS ON THE ASSESSEE, WHICH IS T O BE MADE WITH REFERENCE TO ITS ACCOUNTS AND/OR OTHER RECORDS, WITH THE A.O. OBLIGE D TO ALLOW THE ASSESSEE AN OPPORTUNITY TO PROVE THE SAME. THEN THE A.O. IS TO EXAMINE THE SAME WITH A VIEW TO SATISFY HIMSELF AS TO ITS CORRECTNESS, STATING THE REASONS FOR HIS OBJ ECTIVE SATISFACTION, OR NOT SO, AS THE CASE MAY BE, AND PROCEED ACCORDINGLY. IN THE INSTANT CAS E, THE SAID INITIAL ONUS HAVING BEEN CLEARLY NOT DISCHARGED BY THE ASSESSEE, WHICH FINDI NG HAS BEEN ENDORSED BY US, THE DISALLOWANCE CANNOT BE IMPUGNED FOR WANT OF NON-COM PLIANCE OF THE PROCEDURE LAID DOWN U/S.14A(2). AGAIN, HOWEVER, AS WE OBSERVE, NONE OF THE PARTIES OR THEIR REPRESENTATIVES HAVE EVEN AS MUCH AS CARED TO LOOK AT THE FACTS, WH ICH PRIMA FACIE REFLECT AN APPARENT CASE OF BANK BORROWINGS HAVING BEEN AVAILED FOR AND UTILIZED FOR SPECIFIED PURPOSES, SO THAT THE INTEREST THEREON COULD NOT BE SUBJECT TO A PPORTIONMENT ON THE BASIS OF GENERAL POOL OF FUNDS HYPOTHESIS, WHICH WOULD OTHERWISE PRE VAIL. WE CAN ONLY EXPRESS OUR ANGUISH AT THIS CLEAR DISREGARD FOR FACTS, WHICH AR E OF PRIME RELEVANCE IN DECIDING ANY 13 ITA NOS. 3123/M/2011 & 951/M/2012 (A.Y. 2008-09) AFL PVT. LTD. CASE; ON THE CONTRARY, RAISING A HOST OF IRRELEVANT LEGAL ISSUES BEFORE US. THE MATTER MUST, THEREFORE, TRAVEL BACK TO THE FILE OF THE A.O. TO A LLOW THE ASSESSEE AN OPPORTUNITY TO STATE ITS CASE IN THE MATTER, WHO SHALL DECIDE THE SAME I N ACCORDANCE WITH THE LAW, ISSUING DEFINITE FINDINGS OF FACT. THE RELEVANT GROUNDS ARE DECIDED ACCORDINGLY. 8. THE ONLY OTHER ISSUE AGITATED PER THE ASSESSEES APPEAL RAISED PER ITS GROUNDS 4 & 5, IS IN RESPECT OF NON-ALLOWANCE OF THE CLAIM FOR THE BALANCE AMOUNT OF TDS, THAT THE ASSESSEE CLAIMS AT RS.8,98,517/-. DURING THE HEARIN G, IT WAS EXPLAINED BY THE ASSESSEE THAT THE NON-CREDIT IN ITS RESPECT HAD ARISEN AS THE ASS ESSEE WAS UNABLE TO FURNISH THE RELEVANT TDS CERTIFICATES, AND WHICH POSITION OBTAINED EVEN BEFORE THE FIRST APPELLATE AUTHORITY, RESULTING IN HIS DISMISSAL OF THE ASSESSEES CLAIM. THE ASSESSEE IS NOW IN A POSITION TO FURNISH THE SAME, AN OPPORTUNITY FOR WHICH WAS PRAY ED FOR. THE LD. DR DID NOT RAISE ANY SPECIFIC OBJECTION TO THE ASSESSEES REQUEST. THE C LAIM FOR TDS IS TO BE FIRSTLY SUBSTANTIATED WITH THE NECESSARY EVIDENCE AND, SECO NDLY, IS TO BE ALLOWED IN RESPECT OF THE INCOME WHICH STANDS BROUGHT TO TAX FOR THE RELEVANT YEAR (SECTION 199). THE MATTER IS, ACCORDINGLY, REMITTED BACK TO THE FILE OF THE A.O. FOR NECESSARY EXAMINATION AND ADJUDICATION IN ACCORDANCE WITH LAW. WE DECIDE ACCO RDINGLY. I.T.A. NO.951/MUM/2012 (BY THE REVENUE) 9. WITH REGARD TO THE REVENUES APPEAL, THE PENALTY STANDS LEVIED ONLY IN RESPECT OF THE DISALLOWANCE EFFECTED U/S.14A R/W R. 8D. 10. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATE RIAL ON RECORD. THE FACTS AND CIRCUMSTANCES STAND DELINEATING IN SUFFICIENT DETAI L WHILE DISCUSSING THE ASSESSEES APPEAL PER PARAS 6.4 TO 6.7 OF OUR ORDER IN RESPECT OF THE ASSESSEES APPEAL (IN ITA NO. 3123/MUM/2011). WE ARE UNABLE TO COMPREHEND THE REV ENUES CASE INSOFAR AS THE LEVY OF PENALTY U/S. 271(1)(C) IS CONCERNED. THE ASSESSE E, PER ITS RETURN, MADE AN ESTIMATED DISALLOWANCE AT 10% OF THE DIVIDEND INCOME RECEIVED FOR THE YEAR, AS ACCEPTED IN THE PAST, I.E., THE TWO IMMEDIATELY PRECEDING YEARS. IN FACT , FOR THE YEARS PRIOR THERETO, A LOWER PERCENTAGE BY HALF, I.E., @ 5%, WAS FOUND ACCEPTABL E, WITH THE MATTER HAVING TRAVELLED 14 ITA NOS. 3123/M/2011 & 951/M/2012 (A.Y. 2008-09) AFL PVT. LTD. UPTO THE TRIBUNAL. THE ISSUE ARISING IS WHETHER THE RULE OF APPORTIONMENT AS PRESCRIBED WOULD APPLY FOR THIS YEAR OR COULD THE ASSESSEE CLA IM A DIFFERENT AMOUNT. THE ASSESSEE THOUGH UNABLE TO SUBSTANTIATE ITS CLAIM WAS YET FOU ND IN QUANTUM PROCEEDINGS TO HAVE A PRIMA FACIE CASE ON THE BASIS OF ITS ACCOUNTS, I.E., THE ANNUA L ACCOUNTS, FORMING PART OF ITS RETURN OF INCOME. THE MATTER STANDS, ACCORDINGLY, R EMITTED BACK TO THE FILE OF THE A.O. IN THIS VIEW OF THE MATTER, SO THAT THERE WAS A SUO MOTU DISALLOWANCE U/S.14A AS FOUND ACCEPTABLE FOR THE PRECEDING YEARS, COUPLED WITH CO MPLETE DISCLOSURE OF FACTS, IT WOULD TAKE THE CASE AWAY FROM THE AMBIT OF LEVY OF PENALT Y FOR CONCEALMENT AND/OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE DECISION IN T HE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P.) LTD. [2010] 322 ITR 158 (SC) WOULD DIRECTLY APPLY IN THE FACTS AND CIRCUMSTANCES OF THE CASE. WE DECIDE ACCORDINGLY. 11. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE REVENUES APPEAL IS DISMISSED. . /5 & './ 0 60 78'9 ' 4 :/ 0 / ;< 0 #. 0 / ;< ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 14, 20 13 SD/- SD/- (I. P. BANSAL) (SANJAY ARORA) / JUDICIAL MEMBER '# / ACCOUNTANT MEMBER MUMBAI; =& DATED : 14.08.2013 .&../ ROSHANI , SR. PS '4 0 ,/> '4 0 ,/> '4 0 ,/> '4 0 ,/> ?'>(/ ?'>(/ ?'>(/ ?'>(// COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT 3. @ ( ) / THE CIT(A) 4. @ / CIT CONCERNED 5. >CD ,/& , , / DR, ITAT, MUMBAI 6. DE' F / GUARD FILE '4& '4& '4& '4& / BY ORDER, 7 77 7/ // /; ; ; ; (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI