M/s. Lily Exporters Pvt. Ltd., Kolkata v. ITO, Ward - 6(2), Kolkata, Kolkata

ITA 1016/KOL/2011 | 2006-2007
Pronouncement Date: 22-11-2011 | Result: Allowed

Appeal Details

RSA Number 101623514 RSA 2011
Assessee PAN AAACL5836C
Bench Kolkata
Appeal Number ITA 1016/KOL/2011
Duration Of Justice 4 month(s) 4 day(s)
Appellant M/s. Lily Exporters Pvt. Ltd., Kolkata
Respondent ITO, Ward - 6(2), Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 22-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 22-11-2011
Assessment Year 2006-2007
Appeal Filed On 18-07-2011
Judgment Text
' IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA ( ) . . ) [BEFORE SRI S.V. MEHROTRA A.M. & SRI MAHAVIR SING H J.M.] ! ! ! ! / I.T.A NOS. 1016 & 1017/KOL/2011 ASSESSMENT YEARS : 2006-2007 & 2007-2008 M/S. LILY EXPORTERS PVT. LTD. KOLKATA -VS.- I NCOME TAX OFFICER WARD-6(2) KOLKATA (PAN : AAACL 5836 C) ( '# /APPELLANT ) ( $%'# / RESPONDENT ) & ! ! ! ! / I.T.A NO. 915/KOL/2011 ASSESSMENT YEAR : 2007-2008 INCOME TAX OFFICER WARD-6(2) KOLKATA -VS.- LIL Y EXPORTERS PVT. LTD. KOLKATA ( '# /APPELLANT ) ( $%'# / RESPONDENT ) FOR THE ASSESSEE ( '# ) : SHRI R. SALARPURIA A.R. FOR THE DEPARTMENT ( $%'# ): SHRI NIRAJ KUMAR D.R. &' ( ) * &' ( ) * &' ( ) * &' ( ) * /DATE OF HEARING : 22.11.2011 + ) * + ) * + ) * + ) * /DATE OF PRONOUNCEMENT : 22.11.2011 - / ORDER PER SHRI S.V. MEHROTRA ACCOUNTANT MEMBER/ . . :- WE FIRST TAKE UP THE APPEAL BEING ITA NO. 1016/KOL./2011 . THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER OF LD. COMMISSIONER OF INCOME- TAX (APPEALS)-VI KOLKATA DATED 18.03.2011 FOR THE ASSESSMENT YEAR 2006-07. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-CO MPANY IN THE RELEVANT ASSESSMENT YEAR CARRIED ON THE BUSINESS OF TRADING AND INVESTMENT I N SHARES AND SECURITIES. IT HAD FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1 40 06 700/ -. THE ASSESSING OFFICER NOTED THAT IN RESPECT OF SHARES THE DETAILS OF WHICH HAVE BEEN R E-PRODUCED FROM PAGES 2 TO 6 OF THE ASSESSMENT ORDER THE ASSESSEE HAD DECLARED CAPITAL GAINS. HE NOTED THAT MOST OF THE SHARES WERE PURCHASED AND SOLD WITHIN A RANGE OF 1 TO50 DA YS AND SOME SHARES OF CERTAIN COMPANIES WERE SOLD WITHIN 1 TO 20 DAYS. HE NOTED THAT THE HO LDING PERIOD IN RESPECT OF MOST OF THE SHARES ITA NOS. 1016 1017 & 915/KOL./2011 2 HAD BEEN VERY SHORT WHICH WAS CLEAR FROM THE FACT T HAT OUT OF THE SHARES OF 60 COMPANIES MENTIONED IN THE TABLE SHARES OF ONLY 17 COMPANIES HAD BEEN HELD FOR MORE THAN 100 DAYS. FROM THE PATTERN OF TRANSACTIONS HE CONCLUDED THAT THE INTENTION OF THE ASSESSEE WAS TO EARN PROFIT THROUGH TRADING OF SHARES AND NOT HOLDING TH EM FOR EARNING EITHER DIVIDEND OR SHORT-TERM CAPITAL GAIN. HE FURTHER OBSERVED THAT DIVIDEND EAR NING WAS NOT THE PRIMARY MOTIVE BEHIND HOLDING THE SHARES. IN THIS REGARD HE HAS OBSERVED THAT OUT OF TOTAL DIVIDEND OF RS.13 16 084/- DISCLOSED BY THE ASSESSEE RS.10 56 893/- HAD BEEN RECEIVED AS DIVIDEND ON LONG-TERM INVESTMENTS AND ONLY MEAGER AMOUNT OF RS.1 78 106/- WAS RECEIVED FROM THE SHARES HELD BY THE ASSESSEE FOR SHORT DURATION. THUS HE CONCLUDED THAT DIVIDEND EARNING WAS IN FACT INCIDENTAL TO THE ASSESSEES SHARE TRADING BUSINESS. 3. AFTER CONSIDERING ALL THE AFOREMENTIONED ASPECT THE ASSESSING OFFICER HELD THAT OUT OF THE TOTAL SHORT-TERM CAPITAL GAIN OF RS.1 40 89 682 /- DISCLOSED BY THE ASSESSEE THE SUM OF RS.1 28 51 503/- WAS TO BE TREATED AS BUSINESS RECE IPT AND REQUIRED TO BE TAXED ACCORDINGLY. LD. CIT(APPEALS) FOLLOWING THE DECISION DATED 19.08.201 1 OF ITAT FOR THE ASSESSMENT YEAR 2005- 06 IN ITA NOS. 1005/KOL./2008 & 1632/KOL/2010 UPHEL D THE ORDER OF ASSESSING OFFICER. 4. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AGAI NST THE ORDER OF TRIBUNAL FOR ASSESSMENT YEAR 2005-06 THE ASSESSEE HAD PREFERRED APPEAL BEF ORE THE HONBLE JURISDICTIONAL HIGH COURT AND THE HONBLE JURISDICTIONAL HIGH COURT HAD SET A SIDE THE ORDER OF TRIBUNAL VIDE ITS JUDGMENT DATED 16.03.2010 AND REMANDED THE ORDER FOR FRESH D ECISION. THEREAFTER TRIBUNAL VIDE ITS ORDER DATED 19.08.2011 CONFIRMED THE FINDING OF LD. CIT(A PPEALS) IN HOLDING THAT THE ASSESSEES INCOME WAS TO BE TREATED AS SHORT-TERM CAPITAL GAIN AND NOT AS BUSINESS INCOME AS HELD BY THE ASSESSING OFFICER. HE THEREFORE SUBMITTED THAT TH E GROUNDS RAISED BY THE ASSESSEE IN THE PRESENT APPEAL ARE SQUARELY COVERED BY THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2005-06. 5. LEARNED DEPARTMENTAL REPRESENTATIVE AGREED THAT THE ISSUE IS COVERED BY THE DECISION DATED 19.08.2011 OF ITAT IN ASSESSMENT YEAR 2005-06 IN ASSESSEES OWN CASE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORDS OF THE CASE. IN ASSESSMENT YEAR 2005-06 LD . CIT(APPEALS) AFTER CONSIDERING THE HOLDING PERIOD OF SHARES HELD THAT THE SURPLUS ON SHORT-TER M INVESTMENT WAS TO BE TREATED AS SHORT-TERM ITA NOS. 1016 1017 & 915/KOL./2011 3 CAPITAL GAIN. AGAINST THE SAID DECISION OF LD. CIT( APPEALS) THE DEPARTMENT HAD PREFERRED APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL REVERSE D THE FINDINGS OF LD. CIT(APPEALS). THE ASSESSEE PREFERRED APPEAL BEFORE THE HONBLE JURISD ICTIONAL HIGH COURT AND THE HONBLE JURISDICTIONAL HIGH COURT VIDE ITS JUDGMENT DATED 1 6.05.2010 WAS PLEASED TO SET ASIDE THE ORDER OF TRIBUNAL AND REMANDED THE MATTER FOR FRESH DECIS ION. TRIBUNAL VIDE ITS ORDER DATED 19.08.2011 IN ITA NOS. 1005/KOL./2008 & 1632/KOL./2 010 HAS HELD AS UNDER :- 5. AT THE TIME OF HEARING THE ID. DR APPEARING ON BEHALF OF THE REVENUE HAS SUPPORTED THE ORDER OF THIS TRIBUNAL AND FURTHER RE ITERATED THE OBSERVATIONS MADE BY THE AO WHICH WAS ALSO INCORPORATED IN THE TRIBUNAL ORDER AND ASSAILED THAT THE ID. CITA) SIMPLY BASED ON THE JUDICIAL RATIOS LAID DOWN BY DIFFERENT FORUMS HAS GIVEN RELIEF TO THE ASSESSCE IGNORING THE OBSERVATIONS MADE BY T HE AO. THEREFORE HE SUPPORTED THE ORDERS OF THIS TRIBUNAL DATED 30.09.2008. 6. ON THE OTHER HAND THE ID. AR APPEARING ON BEHAL F OF THE ASSESSEE HAS STRENGTHENED THE ORDERS OF THE LD. CJT(A) BY POJNTING OUT THE FO LLOWING FACTS: (I) THAT THOUGH THE PERIOD OF HOLDING IS LESS IN SO ME CASES OF TRANSACTIONS AS BY THE_ASSESSEE IN THE INVESTMENT ACCOUNT AND THEY AR E ALL ROUTED THROUGH DEMAT ACCOUNT AND THE REVENUE HAS NOT DISPUTED THESE FACTS. (II) THE AO HIMSELF HAS ACCEPTED THAT THE ASSESSEE IS HOLDING SHARES OF JUBILANT. ORGANOSIS LTD. WHICH WERE APPEARING IN THE FINAL AC COUNTS AS ON 31.3.2004 AS SHORT TERM CAPITAL GAINS HOWEVER HE DISPUTED THE PURCHASE AND SALE OF THE SAID SHARES DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR W ITHOUT ASSIGNING ANY REASONS. (III) HE FURTHER POINTED THAT THE ASSESSEE HAS RECE IVED BONUS SHARES ON ACCOUNT OF THE EXISTING SHARES UPTO THE SHARES ACQUIRED BY THE ASS ESSEE UPTO THE SHARES ACQUIRED BY THE ASSESSEE UPTO 5.4.2004 TO THE EXTENT OF 9103 AN D DISPOSED OF THESE SHARES ALSO DURING THE PREVIOUS YEAR AND THE AO WITHOUT ASSIGNI NG ANY REASONS HAS STATED THE SAME AS BUSINESS INCOME. (IV) ALL THESE SHARES HAVE BEEN DECLARED BY THE ASS ESSEE IN THE INVESTMENT PORTFOLIO AND THE REVENUE HAS NOT DISPUTED THE SAME. (V) THE HONBLE HIGH COURT BASED ON THE ABOVE FACTS HAS RESTORED THE MATTER TO THE TRIBUNAL FOR RE-CONSIDERATION. THEREFORE HE REQUESTED TO UPHELD THE ORDERS OF THE ID. CIT(A). 7. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD IT IS OBSERVED THAT OUT OF THE TOTAL 162 LA KHS OF SHORT TERM CAPITAL GAINS AN AMOUNT OF 159 LAKHS ARE RELATING TO JUBILANT ORGANO SIS LTD. IN THIS CASE THE ASSESSEE IS ALREADY HAVING SHARES OF 2045 AS ON 31.3.2004 IN TH E INVESTMENT PORTFOLIO AND THE AO HAS ACCEPTED THE SALE OF THE SAID SHARES AS SHORT T ERM CAPITAL GAINS IN THE ASSESSMENT ORDER WHEREAS THE SUBSEQUENT SHARES PURCHASED BY TH E ASSESSEE OBTAINED AS BONUS ITA NOS. 1016 1017 & 915/KOL./2011 4 SHARES HAS BEEN TREATED BY THE AO AS BUSINESS INCOM E WITHOUT ASSIGNING THE REASONS. THEREFORE IN OUR CONSIDERED OPINION THE AO IS NOT JUSTIFIED TO TREAT PART OF THE TRANSACTIONS IN RESPECT OF SOME OF THE SHARES OF TH E SAME COMPANY AS SHORT TERM CAPITAL GAIN AND THE BALANCE AS BUSINESS INCOME WIT HOUT BRINGING ANY MATERIAL TO THIS EFFECT. 7.1. IT IS FURTHER OBSERVED THAT IN THE CASE OF NT PC AND WESTERN INDIA LIMITED WHERE THE ASSESSEE IS HAVING A CLOSING BALANCE THE SAME HAS BEEN VALUED BY THE ASSESSEE AT COST OF SHOWING THE SAME UNDER INVESTME NT PORTFOLIO. THEREFORE AO IS NOT JUSTIFIED TO TREAT THE SAID SHARES AS BUSINESS INCO ME OF THE ASSESSEE THOUGH THERE IS NO DISPUTE THAT THE ASSESSEE HAS SHOWN THE SAME UNDER INVESTMENT PORTFOLIO. SIMILARLY IN RESPECT OTHER SHARES ALSO SINCE THE ASSESSEE HAS CO NSISTENTLY SHOWN THE SAME IN THE INVESTMENT PORTFOLIO AO IS NOT JUSTIFIED TO TREAT L ONG TERM CAPITAL GAIN DERIVED IN THE SALE AND SUCH SHARES AS BUSINESS INCOME OF THE ASSE SSEE WITHOUT BRINGING ANY MATERIAL EXCEPT BY STATING THAT THE SCALE OF ACTIVITY WAS FR EQUENT AND HUGE AND THE QUANTITY PURCHASE AND SALE ARE LOOSE. IN ADDITION TO THE ABO VE WE CONSIDER IT VITAL TO MENTION THE OBSERVATIONS MADE BY THE HONBLE JURISDICTIONAL HIG H COURT WHICH IS AS UNDER WE HAVE GONE THROUGH THE ENTIRE RECORDS AND ALSO T HE MATERIALS. WE ARE OF THE VIEW THAT THERE ARE MATERIALS AND IF CONSIDERED IN A PROPER MANNER THEN TWO POSSIBLE VIEWS AS REGARDS CLASSIFICATION OF INC OME ARE POSSIBLE. THE LEARNED TRIBUNAL HAS NOT CONSIDERED THE NATURE OF T HE TRANSACTIONS ACTUALLY WHICH WAS BROUGHT ON RECORD. UNDER SUCH CIRCUMSTANC ES WE THINK THAT THIS PORTION OF THE INCOME OF RS.1 62 05 046/- NEEDS REC ONSIDERATION FOR CLASSIFICATION OF THE PROPER HEAD FOR COMPUTATION. 7.2. IN VIEW OF THE ABOVE WE ARE OF THE VIEW THAT I D. CIT(A) HAS RIGHTLY CONCLUDED THAT THE ASSESSEES INCOME IS TO BE TREATED AS SHORT TER M CAPITAL GAIN AND NOT AS BUSINESS INCOME AS HELD BY THE AO. THEREFORE WE CONFIRM THE ACTION OF ID. CIT(A) IN RESPECT OF GROUND NO. 3. 7.3. THIS ORDER IS TO BE READ WITH THE EARLIER ORDE R OF THIS TRIBUNAL DATED 30.09.2008 IN RESPECT OF GROUND NO.1 AND 3 ARE CONCERNED. 6.1. THE FACTS ARE IDENTICAL TO ASSESSMENT YEAR 200 5-06. THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF TRIBUNAL FOR ASSESSMENT YEAR 2005-0 6 THE ASSESSEES APPEAL IS ALLOWED. 7. NOW WE TAKE UP THE APPEAL BEING ITA NO. 1017/KOL./2011 . THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER OF LD. COMMISSIONER OF INCOME- TAX (APPEALS)-VI KOLKATA DATED 18.03.2011 FOR THE ASSESSMENT YEAR 2007-08. 8. GROUND NO. 1 OF THIS APPEAL READS AS UNDER :- FOR THAT IN VIEWE OF THE FACTS AND CIRCUMSTANCES O F THE CASE THE LD. CIT(A.) WAS WHOLLY WRONG AND UNJUSTIFIED IN CONFIRMING THE AOS ACTION IN ASSESSING THE NET SHORT TERM CAPITAL GAIN OF RS.13 22 033/- ON SA LE OF SHARES OF FIVE COMPANIES AS BUSINESS INCOME ON MERE ASSUMPTION AND PRESUMPTI ON. THE ACTIONS OF BOTH THE AO & THE LD. CIT(A.) WERE WHOLLY UNREASONABLE UNCALLED FOR AND BAD IN LAW. ITA NOS. 1016 1017 & 915/KOL./2011 5 8.1. GROUND NO. 1 OF THIS APPEAL IS IDENTICAL WITH GROUND NO. 1 IN ITA NO. 1016/KOL./2011 FOR ASSESSMENT YEAR 2006-07 AS ALREADY DISCUSSED AB OVE. BY RESPECTFULLY FOLLOWING THE SAME THIS GROUND OF APPEAL IS ALLOWED. 9. GROUND NO. 2 OF THIS APPEAL IS AS UNDER :- FOR THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A.) WAS WHOLLY WRONG AND UNJUSTIFIED IN CONFIRMING THE AOS ACTION IN DISALLOWING LOSS OF RS.1 26 976/- (RS.1 26 781/- + RS.195/-) UNDER S ECTION 94(7) OF THE ACT ON SALE OF SHARES OF TWO COMPANIES NAMELY M/S. RELIAN CE INDUSTRIES AND M/S. CENTURY TEXTILES WITHOUT CONSIDERING THE FACT THAT THE PROVISION OF SECTION 94(7) WAS NOT ATTRACTED IN RESPECT OF THOSE TRANSACTIONS. THE ACTIONS OF BOTH THE AO AND LD. CIT(A.) WERE WHOLLY UNREASONABLE UNCALLED FOR AND BAD IN LAW. 9.1. BRIEF FACTS OF THE ISSUE ARE THAT DURING THE Y EAR THE ASSESSEE-COMPANY HAD EARNED TOTAL DIVIDEND OF RS.34 33 476/-. ASSESSING OFFICER WHILE EXAMINING THE DETAILS SCRIPT-WISE DIVIDEND NOTED THAT IN THE FOLLOWING CASES THE ASSESSEE-COM PANY VIOLATED THE PROVISION OF SECTION 94(7) OF THE INCOME TAX ACT 1961 :- SL. NO. NAME OF SCRIPT QUANTITY DATE OF PURCHASE RECORD DATE DATE OF SALE DIVIDEND/PROP ORTIONATE DIVIDEND (RS.) LOSS SUFFERED (RS.) 1. CENTURY TEXTILE 65 27.04.06 12.07.06 04.10.06 195/- 4832/- 2. RELIANCE INDUSTRIES 14075 11.05.06 03.06.06 31.07.06 TO 03.08.06 126781/- 21 42 820/- 3. VSNL 5000 04.05.06 16.08.06 06.10.06 22500/- 80 450/- 4. CIPLA LTD. 5000 08.05.06 22.08.06 01.09.06 10000/- 1 04 400/- TOTAL DIVIDEND VIOLATED UNDER SECTION 94(7) RS.1 59 476/- THEREFORE HE DISALLOWED RS.1 59 476/- FROM THE DIV IDEND INCOME AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE-COMPANY. 10. LD. CIT(APPEALS) IN HIS IMPUGNED ORDER CONFIRME D THE ASSESSING OFFICERS ACTION TO THE EXTENT OF RS.1 26 976/- AFTER DELETING THE DISA LLOWANCE OF RS.32 500/- RELATING TO SHARES OF VSNL AND CIPLA LIMITED. AT THE TIME OF HEARING LD. COUNSEL FOR THE ASSESSEE ACCEPTED THE FINDINGS OF LD. CIT(APPEALS). ITA NOS. 1016 1017 & 915/KOL./2011 6 11. AFTER HEARING BOTH THE SIDES WE DO NOT FIND AN Y REASON TO INTERFERE WITH THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS) THEREFORE TH IS GROUND IS DISMISSED. 12. GROUND NO. 3 OF THIS APPEAL READS AS UNDER :- FOR THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A.) WAS WHOLLY WRONG AND UNJUSTIFIED IN RESTRICTING THE DIS ALLOWANCE OF ADMINISTRATIVE EXPENSES UNDER SECTION 14A OF THE ACT TO RS.40 722/ - ON ESTIMATE @ 1% OF THE EXEMPT INCOME OF RS.40 72 235/- (DIVIDEND RS.34 33 467/- + LTCG RS.6 38 768/-) INSTEAD OF DELETING IT IN FULL WITHO UT CONSIDERING THE FACT THAT NO SUCH EXPENSE ATTRIBUTABLE TO THE EARNING OF EXEMPT INCOME WAS INCURRED BY THE ASSESSEE. THE ACTIONS OF BOTH THE AO AND THE LD. CI T(A.) WERE WHOLLY UNREASONABLE UNCALLED FOR AND BAD IN LAW. 12.1. BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSESS ING OFFICER COMPUTED THE EXPENDITURE RELATING TO EARNING OF EXEMPT INCOME BY APPLYING RULE 8D AND THEREFORE DISALLOWED RS.37 22 877/- UNDER SECTION 14A READ WITH RULE 8D OF THE ACT. LD. CIT(APPEALS) RELYING ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MANUFACTURING LTD. OBSERVED THAT RULE 8D WAS NOT APPLICABLE FOR ASSESSMENT YEAR 2007-08 AND AFTER CONSIDERING THE DETAILS OF EXPENSES INCURRED BY THE ASSESSEE INCLUDING INTE REST EXPENDITURE RESTRICTED THE DISALLOWANCE TO 1% OF THE DIVIDEND EARNED BY THE ASSESSEE. BEING AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE RECORDS OF THE CASE. WE FURTHER FIND THAT THE TRIBUNAL KOLKATA BENCH ON TH E SAME FACTS IN THE CASE OF SAGRIKA GOODS & SERVICES PVT. LTD. -VS.- INCOME-TAX OFFICER I.T.A NO. 1278IKOL/2010 ASSESSMENT YEAR 2005- 06 DATED 24TH SEPTEMBER 2010 HAS HELD AS UNDER: 5. HEARD THE RIVAL SUBMISSIONS PERUSED THE MATER IAL AVAILABLE ON RECORD AND THE DECISIONS RELIED ON BY THE LD. AUTHORISED R EPRESENTATIVE OF THE ASSESSEE CITED SUPRA. WE FIND THAT ON THE ISSUE OF DISALLOWANCE U/S. 14A THIS BENCH OF THE TRIBUNAL HAS BEEN TAKING A CONSISTENT VIEW THAT THIS DISALLOWANCE SHOULD BE RESTRICTED TO 1% OF DIVIDEND INCOME. FOLL OWING THE SAME IN THIS APPEAL ALSO WE HOLD THAT THE DISALLOWANCE U/S 14A F OR EARNING EXEMPT DIVIDEND INCOME SHOULD BE RESTRICTED TO 1% OF DIVIDEND INCOM E. THE ASSESSING OFFICER IS ACCORDINGLY DIRECTED TO DO SO AND WORK OUT THE QUAN TUM OF DISALLOWANCE. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED AS DIRE CTED ABOVE. THIS FACT IS NOT DISPUTED BY LD. D.R. THEREFORE WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(APPEALS). ACCORDINGLY THE SAME IS CONFIRMED. RESULTANTLY THIS GROUND OF APPEAL IS DISMISSED. 14. NOW WE TAKE UP THE APPEAL BEING ITA NO. 915/KOL./2011 . ITA NOS. 1016 1017 & 915/KOL./2011 7 THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME- TAX (APPEALS)-VI KOLKATA DATED 18.03.2011 FOR THE ASSESSMENT YEAR 2007-08 ON FOLLOWING GROUND :- THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE L D. CIT(A.) HAS ERRED IN LAW AS WELL AS THE PRESCRIBED RULE AND ITS APPLICABILI TY ON THE FACTS IN DELETING THE ADDITION TO THE EXTENT UNDER SECTION 14A OF THE I.T . ACT TO 1% OF TOTAL DIVIDEND EARNED AT OF RS.36 82 155/- MADE UNDER SECTION 14A READ WITH RULE 8D. 15. THIS ISSUE IS IDENTICAL WITH THE ISSUE RAISED I N GROUND NO. 3 IN ITA NO. 1017/KOL./2011 IN ASSESSEES APPEAL. AS WE HAVE ALREADY DECIDED TH E ISSUE EARLIER ABOVE BY CONFIRMING THE ORDER OF LD. CIT(APPEALS) THEREFORE THIS GROUND O F APPEAL IS DISMISSED. 16. IN THE RESULT THE APPEAL BEING ITA NO. 1016/KO L/2011 FILED BY THE ASSESSEE IS ALLOWED. THE APPEAL BEING ITA NO. 1017/KOL./2011 FILED BY TH E ASSESSEE IS ALLOWED IN PART AS INDICATED ABOVE. THE APPEAL BEING ITA NO. 915/KOL./2011 FILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/ 11/2011. & . / - 22/11/2011. SD/- SD/- [ MAHAVIR SINGH / ] [S.V. MEHROTRA/ ( . . )] JUDICIAL MEMBER/ ACCOUNTANT MEMBER/ DATED : 22/ 11/ 2011 COPY OF THE ORDER FORWARDED TO: 1. M/S. LILY EXPORTERS PVT. LTD. 7 LYONS RANGE 3 RD FLOOR KOLKATA-1. 2 ITO WARD-6(2) P-7 CHOWRINGHEE SQUARE KOLKATA-70 0 069. 3. COMMISSIONER OF INCOME-TAX (APPEALS) WB- KOLKATA 4. CIT- KOLKATA 5 DR KOLKATA BENCHES KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR I.T.A.T. KOLKATA LAHA SR. P.S.