These two cross appeals by the revenue and assessee are directed against the order of ld. CIT (A)-1, Jaipur dated 18.03.2016 pertaining to assessment year 2011-12. First, we take up assessees appeal in ITA No. 416/JP/2016. The assessee has raised the following grounds of appeal :- ITA Nos. 554 & 416/JP/2016 Dr. Bimal Roy Soni, Jaipur. 1. On the facts and in the circumstances of the case, the ld. CIT erred in confirming the disallowance of interest amounting to Rs. 33,19,540/- (total disallowance Rs. 80,26,665/-) made by assessing officer by invoking the provisions of section 14A (r.w. rule 8D) of Income Tax Act, 1961.

1.1. That the ld. CIT (A) has further erred in ignoring the fact that there was no direct nexus between the borrowed funds and investment in securities having exempted income, thus the disallowance of Rs. 33,19,540/- confirmed by CIT (A) deserves to be deleted.

1.2. That the ld. CIT (A) has further erred in ignoring the fact that by making investment having tax free income, assessee assumed holding in those companies and thus the investment is under business expediency therefore no disallowance be made u/s 14A of the Income Tax Act, 1961.

2. That the appellant craves the right to add, delete, amend or abandon any of the grounds of appeal either before or at the time of hearing of appeal.

2. Briefly stated the facts are that case of the assessee was picked up for scrutiny assessment and the assessment under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the) was framed vide order dated

25.03.2014. While framing the assessment, the AO observed that the assessee has claimed expenditure of Rs. 89,78,807/- under the head Interest to various parties and financial institutions. Under these facts, the AO invoked the provisions of section 14A read with rule 8D and made disallowance of Rs. 80,26,665/- and added the same to the income of the assessee. Aggrieved by this, the assessee preferred an appeal before ld. CIT (A), who after considering the submissions restricted the addition to the extent of Rs. 33,19,540/-. Aggrieved, the revenue is in appeal before this Tribunal. ITA Nos. 554 & 416/JP/2016 Dr. Bimal Roy Soni, Jaipur.

3. The ld. Counsel for the assessee reiterated the submissions as made in the written brief and submitted that the issue is squarely covered by the decision of this Bench in the assessees own case pertaining to assessment years 2008-09 & 09-10.

3.1. On the contrary, the ld. D/R opposed the submissions.

3.2. We have heard rival contentions, perused the material available on record and gone through the orders of the authorities below. It is contended that the investment made in the sister concerns was to have controlling interest and in respect of the investment made in partnership firms, it is contended that income from partnership firms in the form of remuneration is duly offered for tax. The income in the form of share in profits of the firm is also subject to tax which was borne by the partners. It is submitted that share in profits of firm apparently seems to be exempt income, but eventually the same comes in the hands of the partners after suffering tax in their profit sharing ratio. Thus the tax is also borne by the respective partner. We find that the Coordinate Bench in ITA Nos. 105 & 687/JP/2012 for the A.Y. 2008-09 & 09-10 has decided the issue in para 4.3. of its order by holding as under :-

4.3. We have heard rival contentions, perused the material on record and gone through the orders of the authorities below. The ld. CIT (A) has deleted the disallowance on the ground that it has been held by the coordinate Bench in assessees own case pertaining to A.Y. 2002-03 that provisions of section 14A are not applicable. Since the facts are identical in the year under appeal also, the contention of the assessee throughout has been that the investment wherefrom it has earned exempt income were made for the purpose of maintaining the controlling interest. Therefore, in view of the decision of the Tribunal, provisions of section 14A would not be applicable. The coordinate Bench in ITA Nos. 554 & 416/JP/2016 Dr. Bimal Roy Soni, Jaipur. assessees own case in the assessment year 2002-03 had deleted the addition on the basis that provisions of section 14A would not be applicable in the case of the assessee as the investment has been made solely for the purpose of having the controlling interest. There is no change into the facts in this year as well. The revenue has not brought to our notice any contrary binding precedent. Moreover, the assessee has dividend income to the tune of Rs. 756/- and the disallowance towards expenditure is made at Rs. 44,89,436/-. In view of above, we do not see any reason to interfere in the order of the ld. CIT (A). The same is hereby upheld.

The facts are identical in this year as well. Therefore, taking a consistent view, we direct the AO to delete the addition. Ground raised in this appeal is allowed.

4. Now we take up revenues appeal in ITA No. 554/JP/2016. The revenue has raised the following grounds of appeal :-

Whether on the facts and in the circumstances of the case and in law, the ld. CIT (A) has erred in deleting the disallowance of Rs. 47,07,125/- out of total disallowance of Rs. 80,26,665/- made by the AO under the provisions of section 14A of the I.T. Act r.w. Rule 8D of the I.T. Rules.

5. The representatives of the respective party have adopted the same argument as made in ITA No. 416/JP/2016. The only effective ground in revenues appeal is against restricting the disallowance made under rule 8D of the Income Tax Rules. Since this issue is decided in favour of the assessee in the assessees appeal in ITA No. 416/JP/2016, we do not see any merit in the contention of the ld. D/R, the same is dismissed.

6. In the result, appeal of the assessee is allowed whereas appeal of the revenue is dismissed. ITA Nos. 554 & 416/JP/2016 Dr. Bimal Roy Soni, Jaipur. Order pronounced in the open court on 08 /03/2017. Sd/- Sd/- ( HkkxpUn] ( dqy Hkkjr) (BHAG CHAND ) ( KUL BHARAT ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Jaipur Dated:- 08/03/2017. d/ vknsk dh izfrfyfi vxzsf"kr@Copy of the order forwarded to:

1. The Appellant- The ACIT, Circle-1, Jaipur.

2. The Respondent Dr. Bimal Roy Soni, Jaipur.

3. The CIT(A).

4. The CIT,

5. The DR, ITAT, Jaipur

6. Guard File (ITA No. 554 & 416/JP/2016) vknskkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar ITA Nos. 554 & 416/JP/2016 Dr. Bimal Roy Soni, Jaipur.