UNION BANK OF INDIA, MUMBAI v. ASST CIT LTU, MUMBAI

ITA 6982/MUM/2013 | 2002-2003
Pronouncement Date: 30-04-2015 | Result: Allowed

Appeal Details

RSA Number 698219914 RSA 2013
Assessee PAN AAACU0564G
Bench Mumbai
Appeal Number ITA 6982/MUM/2013
Duration Of Justice 1 year(s) 5 month(s)
Appellant UNION BANK OF INDIA, MUMBAI
Respondent ASST CIT LTU, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 30-04-2015
Assessment Year 2002-2003
Appeal Filed On 29-11-2013
Judgment Text
F IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH MUMBAI BEFORE SHRI G.S. PANNU ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA JUDICIAL MEMBER ./ I.T.A. NOS. 6982 TO 6984 /MUM/2013 ( / ASSESSMENT YEARS : 2002-03 2003-04 & 2004-05 UNION BANK OF INDIA CENTRAL ACCOUNTS DEPARTMENT VI FLOOR 239 VIDHAN BHAVAN MARG NARIMAN POINT MUMBAI 400 021. / VS. ACIT LTU 29 TH FLOOR WORLD TRADE CENTRE CUFFE PARADE MUMBAI 400 005. ./ PAN : AAACU0564G ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI C. NARESH R E SPONDENT BY : SHRI RAJESH RANJAN PRASAD / DATE OF HEARING : 28-04-2015 / DATE OF PRONOUNCEMENT : 30-4-2015 [ !' / O R D E R PER G.S. PANNU A.M . : THE CAPTIONED ARE THREE APPEALS PREFERRED BY THE AS SESSEE PERTAINING TO ASSESSMENT YEARS 2002-03 TO 2004-05 WHICH ARE DIRE CTED AGAINST THREE SEPARATE BUT SIMILARLY WORDED ORDERS OF THE LD. CIT (A) DATED 14-8-2013 WHICH IN TURN ARISE FROM THE ORDERS PASSED BY THE A.O. GI VING EFFECT TO CIT(A)S ORDER IN CIT(A) LTU/ACIT LTU/24/2010-11 DATED 28-02-201 1 & ITATS ORDER DATED 30-06-2011. 2. IN ALL THE APPEALS THE SOLITARY GRIEVANCE OF TH E ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OUT OF INTEREST EXPENDITURE BY INVOKING THE PROVISIONS OF SECTION 14 A OF THE INCO ME TAX ACT 1961. SINCE THE ITA 6982 TO 6984/M/13 2 ISSUE AND THE FACTS AND CIRCUMSTANCES ARE IS COMMON IN ALL THE THREE APPEALS THE APPEAL FOR A.Y. 2002-03 IS TAKEN AS THE LEAD CA SE IN ORDER TO APPRECIATE THE FACTUAL MATRIX. 3. IN A.Y. 2002-03 THE ASSESSEE WAS FOUND TO HAVE EARNED INCOME BY WAY OF DIVIDENDS ETC. AMOUNTING TO RS. 172.87 CRORES WH ICH WAS CONSIDERED AS EXEMPT INCOME. INITIALLY IN THE ORIGINAL ASSESSMEN T MADE BY THE A.O. U/S 143(3) OF THE ACT DISALLOWANCE WAS MADE ON AN ESTI MATE BASIS FOR THE PURPOSE OF SECTION 14A OF THE ACT AGAINST WHICH THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) DIRECTED THE A.O. TO COMPUTE THE DISALLOWANCE AS PER RULE 8D OF THE INCOME TAX RULES 1962. (IN SHORT THE RULES). AGGRIEVED BY THIS THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. THE MUMBAI BENCH OF THE TRIBUNAL VIDE ITA NO. 4702 TO 4706/MUM/2010 DATED 30-6-2011 NEGATED THE ACTION OF THE INCOME TAX AUTHORITIES IN COMPUTING THE DISALLOWANCE IN TERMS OF RULE 8D OF THE RULES AS THE AFORESAID RULE WAS FOUND TO BE APPLICABLE FROM A.Y. 2008-09 ONWARDS. NEVERTHELESS THE TRIBUNAL VIDE ITS ORDER DATED 30- 6-2011 (SUPRA) SET ASIDE THE MATTER BACK TO THE A.O. FOR DECIDING THE QUANTU M OF DISALLOWANCE U/S 14A OF THE ACT ON SOME REASONABLE BASIS AS PER THE JUDG MENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. L TD VS. DCIT 238 ITR 81. THE A.O. IN THE IMPUGNED ORDER DATED 25-11-2011 HEL D THAT THE DISALLOWANCE COMPUTED IN TERMS OF RULE 8D WAS A REASONABLE DISAL LOWANCE AND ACCORDINGLY HE MADE A DISALLOWANCE OF RS. 74 82 58 682/- WHICH COMPRISED OF A DISALLOWANCE OF RS. 69 42 58 682/- OUT OF INTE REST EXPENDITURE BY APPLICATION OF RULE 8D(2)(II) OF THE RULES AND A SU M OF RS. 5.40 CRORES OUT OF ADMINISTRATIVE/OTHER EXPENSES BY APPLICATION OF RUL E 8D(2)(III) OF THE RULES. THE AFORESAID DETERMINATION OF DISALLOWANCE UNDER S ECTION 14A WAS CARRIED IN APPEAL BEFORE THE LD. CIT(A) WHO HAS RETAINED A DIS ALLOWANCE OF RS. 47.66 CRORES U/S 14A OF THE ACT BEING THE AMOUNT OF INTE REST ALLOCATED ON A ITA 6982 TO 6984/M/13 3 PROPORTIONATE BASIS TO DETERMINE THE INVESTMENT IN ASSETS YIELDING FREE TAX- FREE INCOME. AGAINST SUCH A DECISION ASSESSEE IS IN APPEAL BEFORE US. 5. BEFORE US THE LD. REPRESENTATIVE FOR THE ASSESS EE HAS RELIED UPON THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. HDFC BANK [2014] 366 ITR 505 (BOM) TO CONTEND THAT NO DISALLO WANCE OF INTEREST EXPENDITURE WAS REQUIRED TO BE MADE IN TERMS OF SEC TION 14A OF THE ACT WHERE OWN FUNDS AND OTHER NON-INTEREST BEARING FUNDS WERE MORE THAN THE INVESTMENT IN TAX FREE SECURITIES. IN THIS CONTENT THE LD. COUNSEL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TO PARA 4.2.3. OF THE LD. CIT(A)S ORDER WHEREIN THE RELEVANT FACTUAL ASPECTS HAVE BEEN CULL ED OUT WHICH SHOW THAT ASSESSEES OWN FUNDS AND OTHER NON-INTEREST BEARING FUNDS WERE MORE THAN THE INVESTMENT IN TAX FREE SECURITIES. ON THAT BASI S IT IS SOUGHT TO BE CONTENDED THAT HAVING REGARD TO THE PROPOSITION LAI D DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF HDFC BANK LTD. (SU PRA) NO DISALLOWANCE OUT OF INTEREST EXPENDITURE WAS REQUIRED TO BE MADE U/S 14A OF THE ACT. 6. ON THE OTHER HAND THE LD. D.R. APPEARING FOR TH E REVENUE HAS MERELY RELIED UPON THE ORDER OF THE AUTHORITIES BELOW. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. INSOFAR AS THE APPLICATION OF RULE 8D OF THE RULES FOR COMPUTING T HE AMOUNT OF DISALLOWANCE IS CONCERNED THE SAME HAS BEEN NEGATED BY THE LD. CIT(A) AS PER THE DISCUSSION MADE BY HIM IN PARA 4.2.3. OF HIS ORDER. ACCORDING TO THE LD. CIT(A) RULE 8D OF THE RULES CANNOT BE APPLIED IN T HE PRESENT CASE BY FOLLOWING THE DECISION OF THE HONBLE BOMBAY HIGH C OURT IN THE CASE OF GODREJ BOYCE & MFG. CO. LTD. (SUPRA). BE AS THAT IT MAY THE AFORESAID ASPECT OF THE MATTER HAS BECOME FINAL INASMUCH AS THERE IS NO CRO SS-APPEAL PREFERRED BY THE REVENUE AGAINST THE AFORESAID DECISION OF THE L D. CIT(A). INSTEAD OF APPLYING RULE 8D OF THE RULES THE LD. CIT(A) PROCE EDED TO DETERMINE THE INTEREST EXPENDITURE RELATABLE TO THE INVESTMENTS W HICH GENERATED TAX FREE ITA 6982 TO 6984/M/13 4 INCOMES WHICH ACCORDING TO HIM WAS TO BE CONSIDERE D AS DISALLOWANCE U/S 14A OF THE ACT. THE LD. CIT(A) HAS COMPUTED THE DIS ALLOWANCE U/S 14A OF THE ACT IN RELATION TO THE INTEREST EXPENDITURE AT RS. 47.66 CRORES. IN PARA 4.2.3 OF HIS ORDER THE LD. CIT(A) HAS NOTED THAT EXEMPT INCOME EARNED BY THE ASSESSEE WAS TO THE EXTENT OF RS. 172.87 CRORES AV ERAGE INVESTMENTS IN ASSETS EARNING TAX FREE INCOME WAS RS. 1056.49 CRORES; AND THE INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE WERE TO TUNE OF RS. 111 82.22 CRORES. THE AFORESAID FIGURES HAVE NOT BEEN DISPUTED BY THE REVENUE AND T HE SAME CLEARLY IMPLY THAT THE INTEREST FREE FUNDS AVAILABLE WITH THE ASS ESSEE ARE MORE THAN THE AVERAGE INVESTMENTS IN ASSETS EARNING TAX FREE INCO ME. THE LD. CIT(A) HAS ALSO NOTED THAT THE ASSESSEE HAD BORROWED FUNDS WHICH WE RE INTEREST BEARING. HOWEVER AS PER THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. RELIANCE UTILITIES AND POWER LTD [2009] 313 ITR 340 (BOM) IT HAS BEEN HELD THAT ; IF THERE WERE FUNDS AVAILABLE BOTH INTEREST-FREE AN D OVERDRAFT AND/OR LOANS TAKEN THEN A PRESUMPTION WOULD ARISE THAT IN VESTMENTS WOULD BE OUT OF THE INTEREST FREE FUNDS GENERATED OR AVAILAB LE WITH THE COMPANY IF THE INTEREST-FREE FUNDS WERE SUFFICIENT TO MET THE INVESTMENT. THE AFORESAID PRINCIPLE LAID DOWN BY THE HONBLE BO MBAY HIGH COURT IN THE CASE OF RELIANCE UTILITIES AND POWER LTD. (SUPRA) I S CLEARLY ATTRACTED IN THE PRESENT CASE AS THE AFORESAID FACTUAL MATRIX SHOWS . THEREFORE IT WOULD HAVE TO BE PRESUMED THAT THE INVESTMENT MADE BY THE ASSE SSEE IN THE ASSETS EARNING EXEMPT INCOME IS OUT OF INTEREST FREE FUNDS AVAILABLE AND NO DISALLOWANCE U/S 14A OF THE ACT IS MERITED HAVING REGARD TO THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF HDFC BANK LTD. (SUPRA). 8. IN THE CASE OF HDFC BANK LTD. (SUPRA) THE QUEST ION BEFORE THE HONBLE BOMBAY HIGH COURT WAS AS FOLLOWS:- (A) WHETHER ON THE FACTS AND IN LAW THE HONBLE TRIBUNAL WAS CORRECT IN HOLDING THAT THE INVESTMENT IN TAX FREE SECURITIES/ INVESTMENTS ARE REPRESENTED BY ASSESSEES OWN FUNDS IN THE SHAPE OF SHARE CAPITAL AND ITA 6982 TO 6984/M/13 5 RESERVES IGNORING THE FACT THAT THE ASSESSEE IS A BANK INVOLVED IN TRANSACTIONS OF MONEY IN VARIOUS FORMS AND TREASURY OPERATIONS IS ONLY OUT OF ITS FUNCTIONS. 9. THE AFORESAID QUESTION WAS ADDRESSED BY THE HON BLE BOMBAY HIGH COURT BY WAY OF THE FOLLOWING DISCUSSION WHICH IS RELEVANT :- 3. WITH REFERENCE TO QUESTION (A) MR. SURESH KUMA R SUBMITTED THAT THE INCOME-TAX APPELLATE TRIBUNAL ERRED IN HOLDING THAT H INVESTMENTS OF THE ASSESSEE IN TAX-FREE SECURITIES/INVESTMENTS WERE FR OM THE ASSESSEE'S OWN FUNDS. SINCE THE ASSESSEE HAD PAID INTEREST ON BORROWED FUNDS AND THE ASSESSEES OWN FUND WERE NOT SEPARATELY IDENTIF IED THE INVESTMENT IN GOVERNMENT SECURITIES HAD BEEN MADE BY THE ASSES SEE-BANK FROM COMMON POOL OF FUNDS AVAILABLE WITH IT. ACCORDING T O MR. SURESH KUMAR AS PER THE PROVISIONS OF SECTION 14A NO DEDUCTION COULD BE ALLOWED IN RESPECT OF EXPENDITURE INCURRED BY THE ASSESSEE AGA INST THE INCOME CLAIMED AS EXEMPT FROM TAX AS APPORTIONMENT OF EXP ENDITURE WAS AN INHERENT PART OF SECTION 14A. HE SUBMITTED THAT IN THE ABSENCE OF A DIRECT N US BETWEEN THE ASSESEES' OWN FUNDS AND THE INVES TMENT MADE BY IT THE INVESTMENT OUGHT TO BE TREATED FROM THE COMMON POOL HAVING BOTH BORROWED AS WELL AS OWN FUNDS OF THE ASSESSEE AND THEREFORE PROPORTIONATE DISALLOWANCE OF INTEREST BY THE ASSESSING OFFICER WAS FULLY JUSTIFIED. HE THEREFOR E SUBMITTED THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE INCOME -TAX APPELLATE TRIBUNAL HAD GONE WRONG ON THIS COUNT THAT REQUIRED INTERFERENCE BY THIS COURT. 4. WE DO NOT AGREE. IN THE CASE AT HAND AS RECORDE D BY THE INCOME- TAX APPELLATE TRIBUNAL UNDISPUTEDLY THE ASSESSEE'S OWN FUNDS AND OTHER NON-INTEREST BEARING FUNDS WERE MORE THAN THE INVES TMENT IN THE TAX FREE SECURITIES. THE INCOME-TAX APPELLATE TRIBUNAL THE REFORE HELD THAT THERE WAS NO BASIS FOR DEEMING THAT THE ASSESSEE HAD USED THE BORROWED FUNDS FOR INVESTMENT IN TAX-TREE SECURITIES. ON THI S FACTUAL ASPECT THE INCOME-TAX APPELLATE TRIBUNAL DID NOT FIND ANY MERI T IN THE CONTENTION RAISED BY THE REVENUE AND THEREFORE ACCORDINGLY A NSWERED THE QUESTION IN FAVOUR OF THE ASSESSEE. ON GOING THROUGH THE ORD ER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) DATED MARCH 28 2005 AS WELL A THE IMPUGNED ORDER WE DO NOT FIND THAT THE COMMISS IONER OF INCOME-TAX (APPEALS) OR THE INCOME-TAX APPELLATE TRIBUNAL ERRE D IN HOLDING IN FAVOUR OF THE ASESSEE. IN THIS REGARD THE SUBMISSION OF M R. MISTRY THE LEARNED SENIOR COUNSEL APPEARING ON BEHALF OF THE ASSESSEE THAT THIS ISSUE IS SQUARELY COVERED BY A JUDGMENT OF THIS COURT IN THE CASE OF CIT V. RELIANCE UTILITIES AND POWER LTD. REPORTED IN [2009 ] 313 ITR 340 (BORN) IS WELL FOUNDED. THE FACTS OF THAT CASE WERE THAT THE ASSESSEE VIZ. MIS. RELIANCE UTILITIES AND POWER LTD. HAD INVESTED CERT AIN AMOUNTS IN RELIANCE GAS LTD. AND RELIANCE STRATEGIC INVESTMENT S LTD. IT WAS THE CASE OF THE ASSESSEE THAT THEY THEMSELVES WERE IN T HE BUSINESS OF GENERATION OF POWER AND THEY HAD EARNED REGULAR BUS INESS INCOME THERE ITA 6982 TO 6984/M/13 6 FROM. THE INVESTMENTS MADE BY THE ASSESSEE IN M/S R ELIANCE GAS LTD. AND M/S. RELIANCE STRATEGIC INVESTMENTS LTD. WERE D ONE OUT OF THEIR OWN FUNDS AND WERE IN THE REGULAR CURSE OF BUSINESS AND THEREFORE NO PART OF THE INTEREST COULD BE DISALLOWED. IT WAS ALSO POINT ED OUT THAT THE ASSESSEE HAD BORROWED RS. 43.62 CRORES BY WAY OF IS SUE OF DEBENTURES AND THE SAID AMOUNT WAS UTILISED AS CAPITAL EXPENDI TURE AND INTERCORPORATE DEPOSIT. IT WAS THE ASSESSEE'S SUBMI SSION THAT NO PART OF THE INTEREST BEARING FUNDS (VIZ. ISSUE OF DEBENTUR ES) HAD GONE INTO MAKING INVESTMENTS IN THE SAID TWO COMPANIES. IT WA S POINTED OUT THAT THE INCOME FROM THE OPERATIONS OF THE ASSESSEE WAS RS. 313.53 CRORES AND WITH THE AVAILABILITY OF OTHER INTEREST-FREE FU NDS WITH THE ASSESSEE THE AMOUNT AVAILABLE FOR INVESTMENTS OUT OF ITS OWN FUNDS WERE TO THE TUNE OF RS. 398.19 CRORES. IN VIEW THEREOF IT WAS SUBMITTED THAT FROM THE ANALYSIS OF THE BALANCE-SHEET THE ASSESEE HAD ENOU GH INTEREST-FREE FUNDS AT ITS DISPOSAL FOR MAKING THE INVESTMENTS. T HE COMMISSIONER OF INCOME- TAX (APPEALS) ON EXAMINING THE SAID MATERIA L AGREED WITH THE CONTENTION OF THE ASSESSEE AND ACCORDINGLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER AND DIRECTED HIM TO ALLOW THE SAME UNDER THE PROVISIONS OF THE INCOME-TAX ACT 1961. THE REVENUE BEING AGGRIEVED BY THE ORDER PREFERRED AN APPEAL BEFORE THE INCOME-TAX APPELLATE TRIBUNAL WHO UPHELD THE ORDER OF THE COMMISSIONER OF INCOME- TAX (APPEALS) AND DISMISSED THE APPEAL OF THE REVENUE. FROM THE ORDER OF THE INCOME-TAX APPELLATE TRIBUNAL THE REVENUE APPROACHED THIS COU RT BY WAY OF AN APPEAL. AFTER EXAMINING THE ENTIRE FACTUAL MATRIX O F THE MATTER AND THE LAW ON THE SUBJECT THIS COURT HELD AS UNDER (PAGE 3 44 OF 313 ITR) : IF THERE BE INTEREST-FREE FUNDS AVAILABLE TO AN AS SESSEE SUFFICIENT TO MEET ITS INVESTMENTS AND AT THE SAME TIME THE AS SESSEE HAD RAISED A LOAN IT CAN BE PRESUMED THAT THE INVESTMEN TS WERE FROM THE INTEREST-FREE FUNDS AVAILABLE. IN OUR OPINION THE SUPREME COURT IN EAST INDIA PHARMACEUTICAL WORKS LTD. V. CI T (1997J 224 ITR 627 (SC) HAD THE OCCASION TO CONSIDER THE DECIS ION OF THE CALCUTTA HIGH COURT IN WOOL COMBERS OF INDIA LTD.S CASE (1982] 134. ITR 219 (CAL) WHERE A SIMILAR ISSUE HAD ARISEN . BEFORE THE SUPREME COURT IT WAS ARGUED THAT IT SHOULD HAVE BEE N PRESUMED THAT IN ESSENCE AND TRUE CHARACTER THE TAXES WERE P AID OUT OF THE PROFITS OF THE RELEVANT YEAR AND NOT OUT OF THE OVE RDRAFT ACCOUNT FOR. THE RUNNING OF THE BUSINESS AND IN THESE CIRCUMSTAN CES THE APPELLANT WAS ENTITLED TO CLAIM THE DEDUCTIONS. THE SUPREME COURT NOTED THAT THE ARGUMENT HAD CONSIDERABLE FORCE BUT CONSIDERING THE FACT THAT THE CONTENTION HAD NOT BEEN ADVANCED EARLIER IT DID NOT REQUIRE TO BE ANSWERED. IT THEN NOTED THAT IN W OOL-COMBERS OF INDIA LTD.'S CASE [1982] 134 ITR 219 (CAL) THE CALC UTTA HIGH COURT HAD COME TO THE CONCLUSION THAT THE PROFITS WERE SU FFICIENT TO MEET THE ADVANCE TAX LIABILITY AND THE PROFITS WERE DEPO SITED IN THE OVER DRAFT ACCOUNT OF THE ASSESSEE AND IN SUCH A CASE IT SHOULD BE PRESUMED THAT THE TAXES WERE PAID OUT OF THE PROFIT S OF THE YEAR AND NOT OUT OF THE OVERDRAFT ACCOUNT FOR THE RUNNIN G OF THE ITA 6982 TO 6984/M/13 7 BUSINESS. IT NOTED THAT TO RAISE THE PRESUMPTION T HERE WAS SUFFICIENT MATERIAL AND THE ASSESSEE HAD URGED THE CONTENTION BEFORE THE HIGH COURT. THE PRINCIPLE THEREFORE WO ULD BE THAT IF THERE WERE FUNDS AVAILABLE BOTH INTEREST-FREE AND O VERDRAFT AND/OR LOANS TAKEN THEN A PRESUMPTION WOULD ARISE THAT IN VESTMENTS WOULD BE OUT OF THE INTEREST-FREE FUNDS GENERATED O R AVAILABLE WITH THE COMPANY IF THE INTEREST-FREE FUNDS WERE SUFFICI ENT TO MEET THE INVESTMENT. IN THIS CASE THIS PRESUMPTION IS ESTABL ISHED CONSIDERING THE FINDING OF FACT BOTH BY THE COMMISS IONER OF INCOME TAX (APPEALS) AND THE INCOME-TAX APPELLATE TRIBUNAL . (EMPHASIS SUPPLIED.) WE FIND THAT THE FACTS OF THE PRESENT CASE ARE SQUA RELY COVERED BY THE JUDGMENT IN THE CASE OF RELIANCE UTILITIES AND POWE R LTD. (SUPRA). THE FINDING OF FACT GIVEN BY THE INCOME-TAX APPELLATE T RIBUNAL IN THE PRESENT CASE IS THAT THE ASSESSEE'S OWN FUNDS AND OTHER NON -INTEREST BEARING FUNDS WERE MORE THAN THE INVESTMENT IN THE TAX-FREE SECURITIES. THIS FACTUAL POSITION IS NOT ONE THAT IS DISPUTED IN TH E PRESENT CASE UNDISPUTEDLY THE ASSESSEES CAPITAL PROFIT RESERVE S SURPLUS AND CURRENT ACCOUNT DEPOSITS WERE HIGHER THAN THE INVESTMENT IN THE TAX-FREE SECURITIES. IN VIEW OF THIS FACTUAL POSITION AS PE R THE JUDGMENT OF THIS COURT IN THE CASE OF RELIANCE UTILITIES AND POWER L TD. (SUPRA) IT WOULD HAVE TO BE PRESUMED THAT THE INVESTMENT MADE BY THE ASSESSEE WOULD BE OUT OF THE INTEREST-FREE FUNDS AVAILABLE WITH THE A SSESEE. WE THEREFORE ARE UNABLE TO AGREE WITH THE SUBMISSION OF MR. SURE SH KUMAR THAT THE TRIBUNAL HAD ERRED IN DISMISSING THE APPEAL OF THE REVENUE ON THIS GROUND. WE DO NOT FIND THAT QUESTION (A) GIVES RISE TO ANY SUBSTANTIAL QUESTION OF LAW AND IS THEREFORE REJECTED. 9. FOLLOWING THE AFORESAID JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE PRESENT CASE WE UPHOLD THE ASSESSEES PLEA FOR DELETION OF ADDITION OF RS. 47.66 CRORES MADE UNDER SECTION 14A OF THE ACT BEIN G THE AMOUNT OF INTEREST EXPENDITURE. THUS APPEAL OF THE ASSESSEE IS ALLOWE D. 10. INSOFAR AS THE FACTS AND CIRCUMSTANCES AND THE DISPUTE IN ASSESSMENT YEARS 2003-04 AND 2004-05 ARE CONCERNED THE SAME A RE PARA MATERIA TO THAT CONSIDERED BY US IN ASSESSEES APPEAL FOR A.Y. 2002 -03 IN EARLIER PARAS. THUS OUR DECISION IN THE APPEAL OF THE ASSESSEE FOR A.Y. 2002-03 WOULD APPLY MUTATIS MUTANDIS IN THE OTHER CAPTIONED APPEALS ALS O. RESULTANTLY OTHER CAPTIONED APPEALS OF THE ASSESSEE ARE ALSO ALLOWED. ITA 6982 TO 6984/M/13 8 11. IN THE RESULT THE CAPTIONED APPEALS OF THE ASS ESSEE ARE ALLOWED AS ABOVE. 12. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL 2015 !' # $% &! ' 30-04-201`5. ( ) SD/- SD/- (AMIT SHUKLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER $ 5 MUMBAI ; &! DATED 30-04-2015 .=../ RK RKRK RK SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. > () / THE CIT(A) CONCERNED MUMBAI 4. > / CIT - CONCERNED MUMBAI 5. AB( ==CD CD $ 5 / DR ITAT MUMBAI F BENCH 6. (FG H / GUARD FILE. ' / BY ORDER A = //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) $ 5 / ITAT MUMBAI