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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI M. BALAGANESH, AM & SHRI AMARJIT SINGH, JM
O R D E R
PER AMARJIT SINGH, JM:
The revenue has filed the present appeal against the order dated 05.11.2018 passed by the Commissioner of Income Tax (Appeals) -52 Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2010- 11.
The revenue has raised the following grounds: - "1. On the facts and circumstances of the case and in law, the Id CIT(A) has erred in restricting the addition to the extent of 12.5% of the bogus purchases of Rs.52,68,07,513 booked by the assessee related to purchase from M/s Ragini Trading and investments Put. Ltd. after setting off the GP shown by the assessee."
ITA No. 538/M/2019 A.Y.2010-11 2 "On the facts and circumstances of the case and in law, the Ld CIT(A) has erred in restricting the addition to the extent of 12.5% of the bogus purchases of Rs.52,68,07,513 booked by the assessee related to purchase from M/s Ragini Trading and Investments Pvt. Ltd. without considering the decision of Hon'ble Apex Court in the case of CIT-vs- DurgaPrasasd 82 ITR 540 even when the assessee failed to prove I the genuineness of transaction or produce the purchase parties.' '3 "On the facts and circumstances of the case and in law, the Ld CIT(A), erred in directing the AO to delete the disallowance u/s 14A of the IT Act r.w.r. 8D(ii) of Rs.4,50,249 relying upon the decision in the case of Maxopp Investment and Cheminvest Ltd. even when the assessee could not submit the fund flow so as to establish as to how the investments have been made from the own surplus funds as on the date of investments because the assessee has also made investments in various assets out of its available funds."
The brief facts of the case are that the assessee filed its return of income on 28.09.2010 declaring a total income to the tune of Rs.15,22,215/-. The assessment u/s 143(3) of the I. T. Act was completed on 22.03.2013 assessing total income to the tune of Rs.1,13,57,910/-. A search action u/s 132 was carried out at Ushdev Group on 11.09.2014. Survey action was also carried out on the premises of the assessee to verify the claim of purchase made by Ushdev Group from the assessee. On verification, it was found that the assessee has booked purchases from M/s. Ragini Trading & Investments Pvt. Ltd. who identified by Sales Tax Department as suspicious and hawala dealers. The assessee failed to produce the evidence in support of the claim of purchase from M/s. Ragini Trading & Investments Pvt. Ltd. The notice u/s 153A dated 04.03.2015 was A.Y.2010-11 issued by the AO. The assessee filed its return of income declaring total income to the tune of Rs.15,22,215/- which he had already filed on dated 28.09.2010. The necessary evidence to support the claim of purchase from M/s. RTIPL was asked. The assessee failed to prove the claim. The purchase in sum of Rs.52,68,07,513/- was declined and added to the income of the assessee. The AO also raised the addition in sum of Rs.6,67,931/- u/s 14A r.w. Rule 8D. The total income of the assessee was assessed in sum of Rs.53,86,15,670/-. Feeling aggrieved, the assessee filed an appeal before the CIT(Appeals) who restricted the addition to the extent of 12.5% and also deleted the addition raised u/s 14A r.w. Rule 8D. Feeling aggrieved, the Revenue has filed the present appeal before us.
ISSUE No. 1 4. Under this issue the assessee has challenged the restriction to the addition to the extent of 12.5% of the bogus purchase in sum of Rs.52,68,07,513/-. Before going further, we deem it necessary to advert the finding of the CIT(A) on record.: - “5.2 I have considered the submissions and contentions of the assessee as also the order of the AO. The assessee contends that no addition in respect of purchases from M/s Ragini Trading & investment P. Ltd. (RTIPL) should be made since the said party has confirmed the transactions and is regularly assessed to Income tax as well as Sales Tax. However, it is an undisputed fact that M/s RTIPL was found to have carried out purchases from certain hawala/bogus suppliers identified by the Sales Tax Department. Further, in course of the survey action on 23.112012 in the case of M/s. RTIPL, it was revealed that this concern is being used for the purpose of layering of the tainted purchases from hawala/bogus suppliers and it has also indulged in circular trading transactions. A.Y.2010-11 It was also observed in course of the survey action that though M/s. RTIPL is showing huge turnover, it is consistently reporting huge losses year after year. For example, in AY 2009-10 on a turnover of Rs 334.55 crores it has reported a loss of (-) Rs 6.32 crores and for Av 2010-11 on a turnover of Rs 836.63 crores it has reported a loss of (-) Rs 4.42 crores which further substantiates the findings of the survey action that this concern is being used for the purpose of layering of the tainted purchases. Therefore, I am of the view that solely on the ground that the assessee has routed tainted purchases through M/s. RTIPL, which has confirmed the transaction and is assessed to Income Tax as well as Sales Tax, the assessee cannot be given any special treatment which is difference from a case where the tainted purchases are directly from the suspicious hawala suppliers. 5.3 The contentions of the assessee have been duly considered. From the factual position which emerges as explained in para 5.2, there is no dispute that the credentials of the said supplier concern are not above board. The only issue to be now adjudicated is whether there are corresponding sales booked by the assessee against the said alleged bogus purchases. For this it will be relevant if the business model of the business of the assessee is examined. The business model of the assessee can best be understood from the statement on oath recorded of the assessee at the time of the survey action since the primary documents seized in the course of the search action and the statement on oath recorded at the time of the search action are most critical and carry immense evidentiary value, though the same not be conclusive as held by the Hon'ble Supreme Court in the case of ulangode Rubber Produce Co. Ltd. (91 ITR 18). The statement recorded at thetime of the search action should be considered to be the most reliable for the reason that it was recorded on the spot and possibility of after- thought or to concoct an explanation and fabricate the evidence is minimum. It is observed that in course of the survey action on 12.09.2014, statement on oath was recorded of the assessee wherein while replying to query no. 4, it was explained that after receipt of orders from the clients, the material is procured from the A.Y.2010-11 market from the suppliers. It was also stated that the delivery is monitored by him, however, the payment to the transporter is done directly by the client. The relevant portion of the said statement on oath is reproduced as under :- Q.4 Please explain the modus operandi of getting orders, payment for material, dispatch and delivery, and documentation required and recorded at each stage. Ans. We received orders via phone or mail from our clients. We then procure the material from the market from various parties. We arrange for the material to be supplied from the vendor to the client and monitor the delivery of material. We receive the order from the client verbally (over the phone or mail.). We then place an order with the vendor verbally. The vendor arranges for the material and delivers the material to the client, which we monitor. After the delivery of material, we receive the invoice from the vendor. In turn, we generate an invoice for the client. The normal credit period is 90 days to 120 days. The transporter only raises the LR with me. The payment for the transportation is done by the client. All the invoices are maintained with the respective LRs. 5.4 From the aforesaid, it can be observed that the assessee has clearly stated that the order for purchase is booked only after receiving a confirmed order for sale. Neither during survey action nor during the assessment proceedings, this claim of business model has not been found to be incorrect. 5.5 It is further noted that at the time of the survey action, the soft copy of the books of accounts of the assessee were impounded which also had quantitative details of the corresponding sales booked against the purchases made. It is observed from the relevant extracts of the said books of the assessee that during the relevant year, the assessee has booked back to back sales against the purchase made from the various suppliers including M/s Ragini Trading & Investment P. Ltd. (RTIPL). It is also relevant to point out as per the tax audit report the assessee is stated to be engaged in the business of trading in steel and no adverse remark A.Y.2010-11 has been made by the Auditors in their Tax Audit Report in clause 28 which provides information about the quantitative details of trading in steel. 5.6 It is also observed that on making an addition of the entire purchase amount s. 52,68,07,513/- from M/s. RTIPL, the GP rate works out to an unrealistic figure 21.38% which is unheard of in the business of trading in steel. Moreover, there is in the contention of the assessee that if the entire purchases are treated as non-genuine, the corresponding sales also should be ignored. 5.7 Since there is a one to one co-relation between the purchases and the sales, the entire amount of purchases cannot be added to the income of the assessee but only the profit element embedded in the transactions can added to the income of the assessee. There cannot be any dispute about a well settled legal proposition that tax can be levied only on real income. It is an elementary rule of accountancy as well as of taxation laws that profit from business cannot be ascertained without deducting cost of purchase from sales, otherwise it would amount to levy of income tax on gross receipts or sales. Such a recourse is not permissible unless it is specifically authorized to do so under any particular provisions contained in the Act. The Hon'ble Jurisdictional High Court in the case of Hariram Bhambhani (ITA No. 313 of 2013) has held that only the profit attributable to the unaccounted sales can be brought to tax. The relevant portion of the order of the Hon'ble jurisdictional High Court is reproduced as under: 5. Being aggrieved, Respondent-Assessee filed an appeal before the CIT(A). In its order, the CIT(A) recorded that during the course of survey, no unaccounted invoices were impounded. Although, there was unaccounted sale bills which were not recorded in the books of account on the date of survey, no document was impounded. However, later in its return filed with the Revenue, it declared turn over at Rs 3.27 crores, showing a net profit of Rs 36.76 lakhs. The CIT(A) relied upon its decision to hold that the Assessing Officer cannot add the amount of Rs 35 lakhs only on the statement made without considering the A.Y.2010-11 surrounding circumstances and evidence to uphold the addition. In the circumstances, the CIT(A) held that in the facts of the case, that only 4% being the profit earned on sales of Rs 35 lakhs can be added to net profit of the applicant. Therefore, only Rs 1.40 lakhs was the profit on unaccounted sales which could be added. Thus, the balance addition of Rs 33.63 lakhs was deleted.
On further appeal, the Tribunal by the impugned order held that the entire sales which are unaccounted cannot be undisclosed income of the assessee, particularly as the purchase 'had been accounted for. 'It was held that only net profit which would arise on such unaccounted 'sales can rightly be taken as the amount which could be added to the Respondent Assessor’s income for the purpose of tax.
The grievance of the Revenue is that Section 69C of the Act is to be invoked and entire amount of undisclosed solos has to be brought to tax. We are unable to appreciate how section 69C or the Act which speaks of unexplained expenditure is all at relevant for this appeal. We are not Conceraglagith any unexplained expenditure in this case.
In any view of the matter, the CIT(A) and Tribunal have come to the concurrent finding that the purchases have been recorded and only some of the sales are unaccounted. Thus, in the above view, both the authorities held that it is not the entire sales consideration which is to be brought to tax but only the profit attributable on the total unrecorded sales consideration which alone can be subject to income-tax. The view taken by the authorities is a reasonable and a possible view. Thus, no substantial question law arises for our consideration.
Appeal dismissed." 5.8 In this regard, it will be apt to refer to certain decisions dealing with this issue. The Hon'ble Gujarat High Court in the case of Bholanath Poly Fab Pvt. Ltd. 355 ITR 290 (Gui) was battling with the finding of Hon’ble ITAT that purchases were made from bogus parties. The Tribunal had held that through A.Y.2010-11 purchases were made from bogus parties, nevertheless, the purchases were not as such bogus as the entire quantity of opening stock, purchases and sales were tallying and hence, only the profit margin embedded in such amount would be subject to tax. The Hon'ble Gujarat High Court held that whether purchases themselves were bogus or whether parties from whom such purchases were made were bogus, is essentially a question of fact and the Tribunal having examined the evidence on record and concluded that the assessee did procure cloth and sell finished goods, the entire amount covered under such purchase cannot be subjected to tax and only the profit element embedded therein was to be taxed, 'no interference is called for in the order of the Tribunal. While coming to the above conclusion, the Hon'ble Gujarat High Court also relied on the decision in the case of Sanjay Oil Cake hid. 316 ITR 274 (Guj). 5.9 From the aforesaid discussion, it is clear that in view of the business model followed by the assessee wherein there is one to one co-relation between the purchases and the sales and also considering the Legal position on the issues as discussed, it is only the profit embedded in the transaction which can be brought to tax and not the entire purchases from MIs, Ragini Trading & Investment P. Ltd. (RTIPL). 5.10 it is well known that unaccounted material may be available in the market at much lower price as compared to the purchases made from genuine dealers on the strength of genuine bills. The real suppliers may be willing to. sell those products at a much lower rate in view of manifold reasons. There may be savings on account of excise duty, sales-tax or other taxes which may be leviable in respect of manufacture and sale of such goods. The real suppliers may derive substantial savings on account non-payment of government taxes which will be shared with the wholesalers, dealers and the end-users. 5.11 To have an idea as to what can be considered to be reasonable profit margin in \ respect of the purchases from the alleged hawala/bogus suppliers, it will be of help if the decisions of A.Y.2010-11 the Hon’ble Courts on the issue of bogus purchases in respect of assessees which are engaged in the business of trading in iron & steel which is similar to our assessee, are examined. 5.12 The Hon'ble Gujarat High Court in the case of CIT vs. Simit Sheth (2013) 38 Taxmann.com 385 (Guj), was seized with an issue where the A.O. had found that some of the alleged suppliers of iron & steel to the assessee had not supplied any goods but had only provided sale bills and hence, purchases from the said parties were held to be bogus. The A.O. in that case added the entire amount of purchases to gross profit of the assessee. The Ld. CIT(A) having found that the assessee had indeed purchased though not from named parties but other parties from grey market, partially sustained the addition as probable profit of the assessee. The Tribunal however, sustained the addition to the extent of 12.5%. Taking into account the above facts, the Hon'ble Gujarat High Court held that since the purchases were not bogus, but were made from parties other than those mentioned in books of accounts, only the profit element embedded in such purchases could be added to the assessee's income and as such no question of law arose in such estimation. The Tribunal while estimating the profit embedded in the transactions @ 12.5% held as under: "Having heard the submissions of both the sides, we have been informed that the malpractice of bogus purchase is mainly to save 10% sales tax etc,. It has also been informed that in this industry about 2.5% is the profit margin. Therefore, respectfully following the decisions of the co-ordinate bench pronounced on identical circumstances, we hereby direct that the, disallowance is required to be sustained at 12.5% of the purchase from those parties. With these directions, we hereby decide the grounds of the rival parties which are partly allowed." 5.13 Similarly, the Hon'ble ITAT, Mumbai had an occasion to adjudicate this issue in the case of M/s Ratnagiri Steels (80 taxmann.com 265) which was engaged in the business of trading in steel. During the year, information was received from the Sales Tax Authorities about purchases from alleged hawala/bogus A.Y.2010-11 suppliers. After due consideration of all the relevant facts, the Hon'ble ITAT confirmed the addition of profits arising from the alleged hawala/bogus purchases by adopting a rate of 12.5%. It was further held by the Hon'ble ITAT that the AO should give credit for the book GP shown by the assessee in respect of the alleged hawala/bogus purchases against the said rate of 12.5%. The relevant portion of the order of the Hon'ble ITAT is reproduced as under: "The authorities below in the instant case did not make any industry comparisons to arrive at fair, honest and rational estimation of GP ratio, rather applied GP ratio of 12.5% on alleged bogus purchases which estimation was in addition to the normal GP ratio declared by the assessee in return of income filed with Revenue. The Revenue made aforesaid additions relying on the presumption that the material was in fact purchased from grey market at a lower rate and to cover deficiencies on record, the invoices were procured from these entry operators to reduce the profit. It was also considered that there will be savings on account of taxes while procuring material from grey market. The authorities below relied upon decision of Hon'ble Gujarat High Court in the case of CUT v. Simit P. Sheth (2013) 356 ITR 451/219 taxman 85 Mag./38 taxmann.com 385, which has estimated disallowance @12.5% of the disputed bogus purchases to meet the end of justice. The authorities below has not brought on record industry comparables nor any rational comparability vis a vis preceding years GP ratio are brought on record. There is no allegation brought on record by Id. DR that similar additions were also made in the immediately regarding year. The assessee earned GP ratio as detailed hereunder for last three years;- Financial Year %GP 2007-08 4.3% 2008-09 5.45% 2009-10 4.9% The books of accounts were not rejected u/s. 145(3) of the 1961 Act by the Revenue, In the immediately preceding year. le. A. Y. 2008-09. the assessee earned GP ratio of 4.3% on total turnover, A.Y.2010-11 while for the year under consid3eration GP ratio earned was 5.45%. In our considered view and based on facts and circumstances of the case as discussed by us in details above, end of justice will be met in this case if GP ratio of 12.5% on alleged bogus purchases is added to income of the assessee against which credit for the declared GP ratio on the alleged bogus purchases will be granted by the AO after verification by the AO because of failure of the assessee to come forward to discharge primary onus cast upon him as detailed above for which assessee is to be blamed and in the midst of aforestated unrebutted allegation against the assessee and non-discharge of primary onus, the declared lower GP ratio of 5.45% in the instant previous year under appeal cannot be accepted. Thus, in nut-shell we are inclined to adopt GP ratio of 12.5% on alleged bogus purchases in the instant case which in our considered view is fair, reasonable and rational keeping in view the factual matrix of the case, while the assessee shall be granted credit of GP ratio declared on this bogus purchases in the return of income filed with the Revenue. The assossee gets part relief. We order accordingly." 5.14 From the aforesaid two decisions, it can be observed that the appropriate percentage for computing the unaccounted profits from the purchases from the suspicious suppliers should factor the savings of taxes etc. due to the unaccounted sales and the GP already shown in the regular books. The ratio of the decision of the Gujarat High Court in the case of Simit P Sheth (supra) cannot be squarely applied since the sales tax rate prevalent in Gujarat was 10% as against only 4% applicable in Maharashtra for the relevant period. However, the facts of the case of the assessee are quite similar to that of Ratnagiri Steels (supra) since the sales tax rate of 4% of Maharashtra itself is applicable. In the case of Ratnagiri Steels(supra), the Hon'ble ITAT directed the AO to allow set off of the book GP against the rate of 12.5% for computing the additional profits from the purchases from the alleged hawala/bogus suppliers. Therefore, as was done by the Hon'ble ITAT, Mumbai in the case of Ratnagiri Steel (supra), it will be appropriate if the rate of 12.5% is applied and against this set off A.Y.2010-11 of the GROSS PROFIT shown in the regular books is allowed. Accordingly, the AO is directed to compute the additional profit in respect of the purchases from the suspicious Supplier- M/s. Ragini Trading & Investment P. Ltd. (RTIPL) by applying the rate of 12.5%. However, the AO will allow a set off of the GROSS PROFIT already shown by the assessee in the regular books in respect of the purchases from the said suspicious supplier while computing the additional profit. Accordingly, ground no.1 of the appeal is partly allowed.”
On appraisal of the above mentioned finding, we find that the CIT(Appeals) has decided the matter of controversy on the basis of the decision of Gujarat High Court in the case of CIT vs. Simit P. Sheth (2013) 38 taxmann.com 385 Guj.) and on the basis of the decision in case of Ratnagiri Steels (80 taxmann.com 265). The CIT(A) has restricted the addition to the extent of 12.5% on the basis of the gross profit (G.P.) of the Assessee under year consideration shown in the regular books of accounts. The facts are not distinguishable at this stage. Taking into account, all the facts and circumstances, we are of the view that the finding of the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, we affirm the finding of the CIT(A) on this issue and decide this issues in favour of the assessee against the revenue.
ISSUE NO.2 6. Under this issue the assessee has challenged the deletion of the addition raised u/s 14A of the Act r.w. Rule 8D of the Rule. Before going further, we deem it necessary to advert the finding of the CIT(A) on record.:- A.Y.2010-11 “6.2 I have considered the facts of the case, submissions and contentions of the assessee as well as the order of the AO. In this case, the AO has made disallowance u/s 14A on the ground that the assessee maintains common pool of funds and common accounts for all its activities and therefore, the expenditure, the incurred in relation to the exempt income has to be computed as per Rule 3D. In support of its action, the AO has relied upon the decision of the jurisdictional High Court in the case of Godrej & Boyce (328 ITR 81), wherein it has been held that wet. AY 2008-09 onwards, if the AO is not satisfied with the correctness of the claim made by the assessee, the disallowance u/s 14A can be computed as per rule 3D. The AO has made an aggregate disallowance of Ps 667,931/- as against disallowance of Ps 2,17682/- voluntarily offered by the assessee. The total disallowance of Rs. 6,67.931/- comprised of disallowance u/f. 8D(2)(i) of Ps 1,37,491/-, u/r. 8D(2)(ii) of Ps 2,84,294/- and u/r. 8D(2)(iii) of Ps 2,46,1461-. After allowing set off of Rs 2,17,682/- voluntarily disallowed by the assessee, the AO made a further addition of Ps 4,50,249/- u/s 14A in the hands of the assessee. 6.3 In the appellate proceedings, the assessee has submitted that the disallowance made by the AO u/r. 8D(2)(i) of Ps 1,37,491/- is not correct since the said expenditure relates to cheque book issue charges, cheque deposit charges, etc which have been incurred in normal course of the business and has no direct nexus to the exempt income/investments. It was further submitted that the disallowance made by the AO u/r. 8D(2)(ii) of Rs 2,84,294/- is not correct since the Ld. CIT(A) in the appeal filed against the original assessment u/s 143(3) has held that the entire interest expenditure has been incurred for the purpose of the business of the assessee. It was also submitted that the disallowance made by the AO u/r. 8D(2)(iii) of Rs 2,46,1461- is not correct since the AO has not recorded any satisfaction for rejecting the suo moto disallowance made by the assessee. 6.4 The contentions of the assessee as well as the view taken by the AO have been duly considered before deciding this issue. The Hon'ble Supreme Court in the case of India Bulls Disallowance u/s ITA No. 538/M/2019 A.Y.2010-11 14A can be made only when the assessee has actually incurred an expenditure in relation to earning of exempt income. This is as per the ratio of the decisions laid out by the Hon'ble Courts in the cases of Maxopp Investment (15 Taxmann.com 390) (Delhi HC), Cheminvest Ltd (Delhi HC) and Hero Cycles Ltd (323 ITR 518) (P & H HC). Once it is found that the assessee has incurred an expenditure in relation to earning of exempt income, the quantum of disallowance u/s 14A can be computed by the AO by applying rule 8D if the AO is not satisfied with the correctness of the claim made by the assessee as regards to the quantum of disallowance offered by it. A mechanism has been implicitly provided in Rule 8D to apportion expenses between the taxable income and the exempt income and by applying it, the indirect expenses related to exempt income can be reasonably quantified for the purpose of disallowance u/s 14A. The contention of the assessee that the AO has not recorded her satisfaction as to why the computation of suo moto disallowance offered by the assessee is not correct and therefore, the said disallowance is not valid is rejected since, the AO after noting that the assessee is maintaining common pool of funds and common accounts for all the activities, had rejected the computation of disallowance u/s. 14A by the assessee and had applied Rule 8D. 6.5 As regards the disallowance made by the AO after invoking Rule 8D(2)(i), it is observed from the order of the Ld. CIT(A) against the appeal filed against the assessment u/s 143(3) that the demat charges of only Rs 27,172/- have been held to have a direct nexus with the exempt income/investments. The AO is, therefore, directed to restrict the disallowance of Rs. 1,37,491/- u/r 8D(2)(i) to Rs 27.172/-. It is further observed from the said order of the Ld. CIT(A) that the entire interest expenditure has been held to have been incurred for the purpose of the business of the assessee and therefore the disallowance made by the AO u/s 36(1)(iii) has been deleted. Also the AO in the original assessment u/s 143(3) has not made any disallowance u/r 80(2)(ii). The AO is therefore, directed to delete the disallowance made of Rs 2,84,294/- out of interest expenditure u/r. 8D(2)(ii). It is also observed from the said order ITA No. 538/M/2019 A.Y.2010-11 of the Ld. CIT(A) that the disallowance made by the AO u/r 8D(2)(iii) in the original assessment u/s 143(3) of Rs 1,90,150/- has been upheld. The AO is therefore directed to restrict the disallowance u/r 8D(2)(iii) of Rs 2,46,146/- to Rs 1,90,150/-. Thus the total disallowance u/s 14A is determined at Rs 2,17,682/- which has already been voluntarily offered by the assessee. Accordingly, this ground of appeal of the assessee is allowed.”
7. The assessee has voluntarily disallowed the expenses to earn the exempt income in sum of Rs.2,17,682/- u/s 14A of the Act. In this year, the assessee has no exempt income. The AO assessed the expenses to earn the exempt income in sum of Rs.6,67,931/-. On appraisal of the above mentioned finding, we find that the CIT(A) has considered this fact that the assessee has no exempt income, therefore, the disallowance u/s 14A r.w. Rule 8D (2)(i) was restricted to the extent of 27,172/- which was on account of DMAT charges and remaining was deleted being no expenses was incurred to earn the exempt income/investments. The CIT(A) has also examined the interest expenses and found the said expenses incurred for the purposes of business of the assessee, hence, the same was ordered to be deleted. He restricted the addition raised under order under Rule 8D(2)(iii) in sum of Rs.1,90,150/- was upheld. The voluntarily disallowance of the assessee was to the tune of Rs.1,90,150/-. Both disallowance was determined in sum of Rs.2,17,682/-. At the cost of repetition, in this year the exempt income has been shown by assessee nil. Anyhow, voluntarily offered and assessed by CIT(A) seems justifiable which is not even challenged by assessee, hence, we find it justifiable to restrict the addition to the extent of Rs.2,17,682/-. No illegality and infirmity found, therefore, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this A.Y.2010-11 appellate stage. Accordingly, this issue is decided in favour of the assessee against the revenue.