M/S. A.G. INDUSTRIES PVT. LTD.,NEW DELHI vs. ACIT, NEW DELHI

PER ANADEE NATH MISSHRA, AM

[A]. This appeal has been filed by the assessee against the order

dated 24.06.2016 passed by Learned Commissioner of Income

Tax(Appeals)-I, New Delhi [in short “Ld.CIT(A)”] pertaining to

assessment year 2012-13. The Assessee has raised following grounds

of appeal:-

ITA No: - 4657/Del/2016

section 143(3) of the Income Tax Act, 1961. In this assessment order,

the Assessing Officer made a further disallowance of Rs. 13,72,440/-

under section 14A of the Income Tax Act r.w.r. 8D Income Tax Rules in

addition to suo moto disallowance of Rs. 01,18,44,660/- made by the

assessee under section 14A. Further the Assessing Officer disallowed

an amount of Rs. 28,81,388/- out of deduction under section 80IC of

Income Tax Act, 1961 amounting to Rs. 32,49,88,100/- claimed by the

assessee. The relevant portions of the assessment order as reproduced

below for ease of reference:-

Disallowance u/s 14A read with Rule 8D During the year assessee has earned exempt income/Dividend income of Rs.2,33,42,646/- and made disallowance of Rs. 1,18,44,660/- on account of expenditure incurred in relation to the said income u/s 14A. Out of this disallowances of Rs. 50,86,500/- has been made in Taxable Units and Rs. 67,58,160/- in Exempt Unit. In this connection the assessee has submitted detailed working of disallowances u/s 14A made as per computation of income. Submission / calculation of the assessee is analyzed in light of the method prescribed as per Rule-8D of the I.T. Rules, in the following table.

ITA No: - 4657/Del/2016

4] Disallowances on account of excess claim of deduction u/s 80 IC As per form 10 CCB the assessee has claimed deduction u/s 80 IC in Haridwar Unit to the tune of Rs. 32,49,88,100/-. The said deduction has been claimed on profit and gains of Rs.36,22,45,554/-. The said profit and gains include other income (interest) of Rs. 28,81,388/-. The assessee was

ITA No: - 4657/Del/2016

asked to explain that why deductions u/s 80 IC should not be disallowed on other income (interest) of Haridwar Unit. Assessee vide letter dated 16.03.2015 submitted that the assessee has earned interest at Rs. 2881388/-from the FDRs etc which are prepared for margin money etc. Otherwise also, it is pertinent to mention that the assessee has paid huge Finance Cost (i.e. Interest) for the said Eligible unit. The interest earned is less than the interest Paid and the assessee could have shown the Net Interest after set off the same within the interest head. It is also not out of place to mention here that the interest income earned would have not been there had the funds not invested and were utilized directly for the eligible business and would have reduced the Finance Cost (Interest paid).Therefore, the Interest Earned is actually, in view of the above discussions, is part and parcel of the income derived from the eligible Unit only. It is a matter of presentation only. Notwithstanding anything contrary to here in above, had there been no Interest expenses and only Interest Income, it can be said that the assessee had earned Interest purely on investments. The explanation of the assessee is not acceptable. Section 80IC of the Income Tax Act, 1961 provides that, “(1) Where the gross total income of an assessee includes any profits and gain derived by an undertaking or an enterprise from any business referred to in sub-section (2), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains, as specified in sub- section (3). (3) The deduction referred to in sub-section (1) shall be-(i) in the case of any undertaking or enterprise referred to in sub-clauses (i) and (iii) of clause (a) of sub-clauses (i) and (iii) of clause (B), of sub-section (@), one hundred percent of such profits and gains for ten assessment years commencing with the initial assessment year; (ii) in the case of any undertaking or enterprise referred to in sub-clauses (ii) of clause (a) of sub-clauses (ii) of clause (b) of sub-section (2), one hundred percent of such profits and gains for five assessment years commencing with the initial assessment year and thereafter twenty- five percent of profit and gains. As per above, it is established that the deduction u/s 80IC of IT' Act, 1961 shall be allowed on the profits and gains from business. However the interest income earned shall be taxed under ‘Income from Other Sources’. Hence, it is clear that interest from fixed deposits is not entitled for deduction u/s 80IC of the Act. Reliance is placed in the case of Pandian Chemicals Ltd. Vs. CIT [262 ITR 278 (SC)], wherein the apex court held that ‘Derivation of interest on profits on deposit with the Electricity Board could not be said to be flowing directly from the industrial undertaking and, therefore, deduction under section 80HH could not be allowed in respect thereof.”

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In view of the above facts, it is clear that the assessee is not entitled for deduction u/s 80 IC of IT Act on interest income from fixed deposits of Rs. 28,81,388/- and the same is being disallowed. (Addition: Rs. 28,81,388/-) In view of above discussions I am satisfied that assessee has furnished inaccurate particulars and concealed his income. Therefore, penalty proceedings u/s 271(1) (c) is initiated separately.”

[C] The assessee filed appeal before the learned CIT(A), who

confirmed both the aforesaid additions. The relevant portions of the

aforesaid impugned appellate order dated 24.6.2016 are reproduced as

under for the ease of reference:-

“I have considered the submission of the appellant and observation of the AO made in the assessment order on the issue It is seen that the AO has disallowed Rs. 1,32,17,100/- as expenses pertaining to earning exempt income as against 1,18,44,660/- disallowed by the appellant in the computation of income. The appellant has calculated the cost of interest incurred by reducing the amount of interest income earned by the appellant from the gross interest expenses While working out disallowance the appellant has taken the net interest expenses after reducing the interest earned by it from the interest expenses whereas the AO has taken the interest cost as gross interest expenditure incurred by the appellant for working out disallowance under rule 8D On going through the provisions of Rule 8D, it is seen that for working out disallowance the amount of interest expenditure incurred by the appellant during the previous year has to be taken for working out disallowance The provision of Rule 8D (2) (ii) is reproduce hereunder: -

"In a case where the assessee has incurred expenditure by way of interest during the previous year which is not directly attributable to any particular income or receipt, an amount computed in accordance with the following formula, namely: - AX B C

Where A= amount of expenditure by way of interest other than the amount of interest included in clause (i) incurred during the previous year;

B= the average of value of investment, income from which does Page | 5

ITA No: - 4657/Del/2016

not or shall not form part of the total income as appearing in the balance sheet of the assessee on the first day and the last day of the previous year:

C= the average of total assets as appearing in the balance sheet of the assessee on the first day and the last day of the previous year " The provision of Rule 8D (2)(ii) talks about interest expenditure incurred by the assessee and it nowhere says that net interest expenditure has to be taken for calculation, therefore, the contention of the appellant that for working out disallowance under rule 8D, the interest cost to the assessee has to be taken is not correct. The various case laws relied upon by the appellant does not deal with the issue involved here, therefore, the same are not applicable to the facts of the appellant’s case Hence, the disallowance worked out by the AO under Rule 8D (2)(ii) taking the gross interest expenditure for working out disallowance of interest expenses pertaining to earning exempt income is correct and no interference is called for. Therefore, this ground of appeal is rejected.”

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The explanation of the assessee is not acceptable. Section 80 IC of the IT Act, 1961 provides that,

“(1) Where the gross total income of an assessee includes any profits and gain derived by an undertaking or an enterprise from any business referred to in subsection (2) there shall, in accordance with and subject to the provisions of the is section be allowed, in computing the total income of the assessee, a deduction from such profits and gains, as specified in sub section 93). (3) The deduction referred to in sub-section (1) shall be (i) in the case of any undertaking or enterprise referred to in sub-clauses (i) and (Hi) of clause (a) of sub-clauses (i) and (iii) of clause (B) of (2) one hundred percent of such profits and gains for ten assessment years commencing with the initial assessment year. (ii) In the case of any undertaking or enterprise referred to in sub-clauses (ii) of clause (a) of sub-clauses (ii) of clause (b) of sub-section (2) one hundred percent of such profits and gains for five assessment years commencing with the initial assessment year and thereafter twenty-five percent of profit and gains. As per above, it is established that the deduction u/s 80 1C of IT Act, 1961 shall be allowed on the profits and gains from business However the interest income earned shall be taxed under Income from Other Sources' Hence, it is clear that interest from fixed deposits is not entitled for deduction u/s 80 1C of the Act. Reliance is placed in the case of Pandian Chemicals Ltd. vs CIT [262 ITR 278(SC)], wherein the apex court held that Derivation of interest on profits on 'deposit with the Electricity Board could not be said to be flowing directly from the industrial undertaking and, therefore, deduction u/s 80 HH could not be allowed in respect thereof" In view of the above facts, it is clear that the assessee is not entitled for deduction u/s 80 1C of IT Act on interest income from fixed deposits of Rs.28,81,388/- and the same is being disallowed.” Submission of the appellant Disallowance of deduction claimed under section 80-1C amounting to Rs 28.81.388/- on account of Interest Income earned at Exempted Unit, Haridwar It is respectfully submitted that the assessee has earned interest at Rs. 28,81,388/- from the FDRs etc which were prepared for margin money etc., in other words for the purposes of the industrial business of the exempted unit only. It is pertinent to mention that the assessee has paid huge Interest for the said Eligible unit The interest earned is less than the interest Paid. The assessee could have shown the Net Interest after set off the same within the Interest head. It is also not out of place to mention here that the Interest income earned would have not been there had the funds not invested and were utilized directly for the eligible business and would have reduced the Finance Cost (Interest paid). Page | 7

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Therefore the Interest Earned is actually, in view of the above discussions, is part and parcel of the income derived from the eligible Unit only. It is a matter of presentation only Notwithstanding anything contrary here in above, had there been no Interest expenses and only Interest Income, it can be said that the assessee had earned Interest purely on investments. Reliance is placed on the following judicial pronouncements: DCIT vs. Himachal Exicom Communication …..on May, 2007

Bench: I Bansal, R Sharma ORDER 1. This is an appeal filed by the revenue against the order of CIT (Appeals) dated 23-1 -2006 for the assessment year 2001 -02. in the matter of order passed under Section 143(3) of the Income Tax Act, 1961 wherein following grounds of appeal have been raised. On the facts and in the circumstances of the case and in law, the CIT (Appeals) erred in i. allowing deduction under Section 80-IB of the Income Tax Act, on interest income on margin money deposited with bank for opening letter of credit and obtaining bank guarantees for business. ii. the appellant craves leave to add, to alter, or amend any ground of the appeal raised above at the time of the hearing. 2. Rival contentions have been heard and record perused Brief facts in this case are that the assessee-company is engaged in the manufacture of telecommunication equipments. The assessee claimed deduction under Section 80-IB of the Act @ 30% of the eligible profits. During the course of assessment under Section 143(3) the assessing officer observed that assessee is claiming; deduction on the basis of profit as per profit and loss account whereas deduction under Section 80-IA of the Act is available on the eligible profit only i.e. the profit from manufacturing activity of eligible unit. The assessing officer assessed interest income on FDRs with banks against margin money and corporate loans, as "income from other sources" instead of eligible business profits claimed by the assessee Accordingly, deduction under Section 80- IB was declined on the interest income. 3. By the impugned order, CIT (Appeals) allowed assessees claim of interest income by observing that assessee was required to invest in FDRs for margin money not for the sake of earning income from investment of surplus funds but as a mandatory requirement in order to obtain orders for sale. It could not have fluctuated tenders without filing bank guarantee and without these bank guarantees, it could not have obtained any orders. Accordingly, he held that these FDRs were purchased out of business compulsion and were inextricably linked with the assessees business activities. The interest income of Rs 34.91 Page | 8

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lakhs was thus held to qualify for inclusion in the profits of the business for the purpose of computing deduction under Section 80-IB of the Act. 4. Aggrieved by the above order of the CIT (Appeals), the revenue is in appeal before us It was contended by the learned Sr. DR Shri. R.L Meena that by no stretch of imagination interest earned on bank deposits can be said to have derived from industrial undertaking so as to qualify for special deduction under Section 80-IB of the Act Fie relied on the proposition laid down by Hon’ble Supreme Court in case of CIT v. Sterling Foods, wherein the Hon’ble Supreme Court has held that "there must be, for the application of the words derived from a direct nexus between the profits and gains and industrial undertaking" As per learned DR in the present case, the earning of interest was incidental to the business of the assessee, therefore, CIT (Appeals) was not at all justified in treating such interest income, as directly flowing from the industrial undertaking for allowing claim of deduction under Section 80- IB of the Act. 4. On the other hand, learned AR Shri. R.S. Singhvi vehemently argued that assessee-company was exclusively engaged in the business of telecommunication equipments as an industrial undertaking and the entire income was covered for the statutory deduction under Section 80-IBof the Act As per learned AR. deposit to the bank was given as a business compulsion and not as per a sweet will of the assessee. and the same was meant for obtaining bank guarantee, LCs etc. without which it is not possible to think of carrying on of manufacturing and sale of telecommunication equipment the business He further contended that in the grounds of appeal, the revenue has not disputed the findings of CIT (Appeals) about the interest as business income There was no dispute that assessee was an industrial undertaking, entire income was covered for statutory deduction under Section 80-IB, and receipts of interest on FDRs purchased out of borrowed funds as a matter of business compulsion and expediency, is in the nature of business, the benefit of deduction under Section 80-IB should have been allowed. He draw our attention to the language of Section 80-IB which reads as "where the gross total income of the assessee includes any profit and gains derived from any business referred to in Subsection (3) to (ii), (iiA) and (OB)...."Mr. Singhvi further contended that on identical facts, benefit under Section 80-IB has been allowed in the preceding year, therefore, revenue cannot be allowed to change its stand, without there being change in the facts and circumstances during the year under consideration. He further submitted that even otherwise there is no infirmity in the order of CIT (Appeals), as benefit of netting is to be allowed even as per the decision of Hon’ble Delhi High Court in case of CIT v. Shri Ram Honda Power Equip. Ltd The purchase of FDRs were out of borrowed funds, therefore, there is on reason to decline netting of the interest expenditure out of the interest income while bringing the net interest income for taxation under the head "Income from other sources" He further relied on various decisions of the following co-ordinate Benches wherein bank interest income was considered as inextricably related to carrying out on business of industrial undertaking and considered for deduction under Section 80-1A of the Act. Page | 9

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“I have considered the submission of the appellant and observation of the AO made in the assessment order on the issue. It is seen that the appellant had claimed deduction u/s 80 1C of Rs.32,49,88.100/- on the profits and gains of the industrial undertaking. The said profits and gains include other income (interest) of Rs.28.81,388/- received from FDRs The AO has held that 80 IC deductions shall be allowed only on the profits and gains from business and interest income earned will be taxed under the head other sources. The AO has observed that interest has been received from the fixed deposit prepared by the appellant for margin money and it has not been derived from the industrial undertaking, therefore, AO disallowed the claim of deduction. During the course of appellant proceedings AR of the appellant reiterated his claim of deduction and relied upon the judgment of ITAT, Delhi in the case of DCIT vs. Himachal Exicom Communications to support his claim. However, it is seen that this judgment does not favour the appellant’s claim, on the contrary the judgment supports the AO’s view. The Hon’ble Supreme Court in the case of CIT Vs. Sterling Food has held that there must be for the application of words derived from a direct nexus between the profits and gains and industry undertaking. The earning of interest to the appellant’s case was incidental to the business and not inextricably linked to the industrial undertaking. Therefore, interest income is not entitled for deduction under Section 80IC. In this regard reliance is placed on following judicial pronouncement:- [2015] 56 taxmann.com 415 (Calcutta)/[2015] 231 Taxman 585 (Calcutta) Page | 10

ITA No: - 4657/Del/2016

“Section 80-IC of the Income-tax Act, 1961 - Deductions- Special provisions in respect of certain undertakings or enterprises in certain special category States (Interest income) - Assessment year 2007-08 - Assessee- company deposited profits and gains of its undertaking and earned interest income from those fixed deposits - It claimed deduction under section 80-IC in respect of said income - Whether interest income earned by assessee would not be treated as income derived from business of manufacture or production of any article or thing by assessee's industrial undertaking for purpose of granting relief under section 80-IC - Held, yes [Para 20] [in favour of revenue]" [2015] 62 taxmann.com 252 (Punjab & Haryana) HIGH COURT OF PUNJAB & HARYANA Commissioner of Income-tax, Patiala vs. H.M. Steels Ltd.* S.J. VAZIFDAR, Actg. CJ. AND G.S. SANDHAWAL/A, J. IT Appeal No. 352 of 2013 (O & M) AUGUST 4, 2015 “Section 80-IC of the Income-tax Act, 1961 - Deductions - Special provisions in respect of certain undertakings or enterprises in certain special category States (Computation of deduction) - Assessment year 2007-08 - Whether any industrial undertaking or enterprise would be entitled to deduction under sub-section (1) of section 80-IC only to extent of profits derived from such an industrial undertaking and not on account of any rebate or incentive made available to it by Government - Held, yes - Whether, therefore, assessee was not entitled to benefit of section 80-IC in respect of sales tax rebate obtained by it - Held, yes [Paras 10 and 15] [In favour of revenue]" The facts of the above judicial pronouncements are identical with the facts of the appellant's case Therefore the ratio of the said judgments is squarely applicable in the case of appellant. In view of the above judicial pronouncements the claim of the appellant of deduction under section 80 IC on interest income received from fixed y deposit is not sustainable and the disallowance is upheld.”

[D]. The assessee has filed this present appeal in Income Tax

Appellate Tribunal (ITAT for short) against the aforesaid impugned

order dated 24.06.2016 of the learned CIT(A).

[E]. We take up ground no. 1 of appeal first. At the time of hearing

before us, the learned counsel for the assessee submitted that for the

purposes of computation of disallowance under section 14A of I.T. Act,

the disallowance under Rule 8D of I.T. Rules is to be done by Page | 11

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considering the net amount of expenditure by way of interest and not

the gross amount of expenditure by way of interest. For this purpose,

the learned counsel for the assessee relied on the following precedents:-

[F]. However, the learned Departmental Representative submitted

that the disallowance of expenditure is to be done under Rule 8D of I.T.

Rules r.w.s. 14A of I.T. Act by considering gross amount of interest

expenditure. For this purpose, he relied on the orders of the Assessing

Officer and the learned CIT(A). In the case of Pr. CIT vs. Nirma Credit &

Capital (P.) Limited (supra), it was held by Hon’ble Gujarat High Court

that amount of expenditure by way of interest would be interest paid by

assessee on borrowings minus taxable interest earned during the

financial year, for the purposes of applying factors in Clause (ii) of Sub

Rule (2) of Rule 8D where assessee pays interest on borrowings, as also

earns taxable interest on investments. Same view has also taken by

Coordinate Benches of ITAT in the case of DCIT vs. DLF Asset Pvt. Ltd. Page | 12

ITA No: - 4657/Del/2016

(supra), DCIT vs. Machino Finance Limited (supra) and DCIT vs. Trade

Apartment Limited (supra), copies of these precedents were filed by the

learned counsel for the assessee, and are placed on record. The

relevant portions from these precedents are reproduced below for the

case of reference:-

From DCIT vs. DLF Asset Pvt. Ltd. (supra) 5. “The decision of Hon’ble High Court in PCIT Vs. Nirma Credit & Capital (P) Ltd. is brought to our notice and it is so held in the said decision that for the purpose of applying factors contended in clause (ii) of sub-rule (2) of rule 8D, prior to its amendment w.e.f. 02.06.2016, amount of expenditure by way of interest would be the interest paid by the assessee on borrowings minus taxable interest earned during the financial year. As a matter of fact Ld. CIT (A) also placed on reliance on the decisions of the ITAT reported in the case of Income Tax Officer, Ahmedabad Vs. Karnavati Petrochem Pvt. Ltd. (ITA No.2228/Ahd./2012 A. Y. 2008-09), and of Mumbai Tribunal in case of Morgan Stanley India Securities Pvt. Ltd. Vs. ACIT ITA No. 5072/Mum/2005 & 6774/Mum./2008 (A. Y. S. 200-02 & 2004-05) and also the decision of his predecessor in assessee’s own case for A. Y. 2008- 09 and 2009-10.

From DCIT vs. Machino Finance Limited (supra)

ITA No: - 4657/Del/2016

loan in the year under consideration has increased by Rs. 2.98 crores and 12.25 crores respectively. So at the most the interest pertaining to the increased investment of Rs. 2.98 crores can proportionately be disallowed. Besides the above we also find that the AO has failed to establish whether the borrowed fund was utilized for the investment in the shares. It is also important to note that the assessee is having both interest income and interest expenses. In this connection various courts have decided to take the net of interest amount while making the disallowance under section 14A read with rule 8D of Income Tax rules 1962. Therefore we are relying in the order of Jurisdictional Tribunal in the case of DCIT Vs. Trade Apartment Limited ITA no. 1277/ko 1/2011. The relevant extract is extracted below : “3. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case as also the applicable legal position. 4. As learned CIT(A) has rightly observed, once there is no net interest expenditure, as is the case before us - upon setting off interest credited to profit and loss account, no part of interest debited can be disallowed as attributable to earning tax free dividend. The CIT(A) was thus quite justified in deleting the interest disallowance. We have also noted that entire expenses incurred by the assessee have been offered for disallowance, and once that happen, nothing remains for further disallowance u/s. 14A. The disallowance under section 14A can come into play only out of expenses claimed/or deduction and expenses have been claimed for deduction, there cannot be any disallowance either. The conclusions arrived at by the CIT(A) are, therefore, correct and admit no interference by us. We, approve and confirm the order of the CIT(A). ” In the instant case the Id. CIT(A) has calculated the disallowance under section 14A r.w.r. 8D of Income Tax Rules after taking the net interest expenditure. We find that the view taken by the Id. CIT(A) is supported with the order of Trade Apartments Limited (Supra). In view of the above proposition of law, we find no reason to interfere in the order of Id. CIT(A). Hence this ground of appeal of the revenue is dismissed.”

From DCIT vs. Trade Apartment Limited (supra)

4.“As learned CIT(A) has rightly observed, once there is no net interest expenditure, as is the case before us - upon setting off interest credited to profit and loss account, no part of interest debited can be disallowed as attributable to earning tax free dividend. The CIT(A) was thus quite justified in deleting the interest disallowance. We have also noted that entire expenses incurred by the assessee have been offered for disallowance, and once that happen, nothing remains for further Page | 14

ITA No: - 4657/Del/2016

disallowance u/s. 14A. The disallowance under section 14A can come into play only out of expenses claimed for deduction and expenses have been claimed for deduction, there cannot be any disallowance either. The conclusions arrived at by the CIT(A) are, therefore, correct and admit no interference by us. We, approve and confirm the order of the CIT(A).”

[F.1]. Respectfully following these precedents in the case of Pr. CIT vs.

Nirma Credit & Capital (P.) Ltd. (supra), DCIT vs. Asset Pvt. Ltd.

(supra), DCIT vs. Machino Finance Limited (supra) and DCIT vs. Trade

Apartment Limited (supra), we decide the issue in dispute in favour of

the assessee and direct the AO to complete disallowance under Rule 8D

of I.T. Rules r.w.s. 14A of the I.T. Act by considering net interest

(interest paid by the assessee on borrowings minus taxable interest

earned during the year) for purpose of Clause (ii) of Sub Rule (2) of Rule

8D.

[G]. As far as second ground of appeal is concerned, the learned

counsel for the assessee relied on the submissions made before the

learned CIT(A) during appellate proceedings before him. These

submissions had already been considered by the learned CIT(A)

relevant portion of which has been reproduced in foregoing paragraph

‘C’ of this order. We are of the view that the order of learned CIT(A) on

this issue is just and fair and in accordance with law, having regard to

the facts and circumstances of the case. The learned counsel for the

assessee has not brought any further materials for our consideration to

persuade as to take view different from the view taken by the learned

ITA No: - 4657/Del/2016

CIT(A). The order of the learned CIT(A) is well reasoned, detailed and

speaking order, in which there is no such infirmity which warrants any

interference by us. Therefore, second ground of appeal is dismissed.

[H]. We now come to the third ground of appeal. The relevant portion

of the order of the learned CIT(A) is reproduced as under:-

Decision I have considered the submission of the appellant, it is seen that expenses disallowed u/s 14A pertains to earning of the exempt income and such disallowance of expenses has to be made u/s 14A which has got over riding affects on section 80 IC. These expenses were pertaining to earning exempt income and same cannot be considered for deduction u/s 80 IC. Therefore, this ground of appeal of the appellant is rejected.”

[H.1]. We are of the view that the order of learned CIT(A) on this issue is

just and fair and in accordance with law, having regard to the facts and

circumstances of the case the learned counsel for the assessee has also

not brought any further materials for our consideration to persuade as

to take a view different from the view taken by the learned CIT(A). The

order of the learned CIT(A) is well reasoned, detailed and speaking Page | 16

ITA No: - 4657/Del/2016

order. No such infirmity in the order of ld. CIT(A) has been brought to

our notice by ld. Counsel of the assessee, warranting any interference

by us. In fact, no specific submissions were made by the ld. Counsel for

the assessee, except that this ground of appeal was consequential to

ground no. 2 of appeal. As no submissions were made on merits of this

ground of appeal, by learned counsel for the assessee; and as we find

no infirmity in the order of ld. CIT(A), we decline to interfere with the

order of the learned CIT(A). Accordingly, third ground of appeal is

dismissed.

[I]. In the result, second and third grounds raised by the assessee in

this appeal are allowed.

[J]. In the result, the appeal is partly allowed. Order pronounced in

open court on 07.11.2019.

Sd/- Sd/- (H.S. SIDHU) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated: 07.11.2019 SH