Per K.C. Singhal, Judicial Member: Since common issues are involved in all these appeals, same are being disposed off by common order for sake of convenience. 2. main issue arising from these appeals is whether lower authorities were justified in disallowing deduction under section 36(1)(iii) of Income-tax Act, 1961 ('the Act') in respect of interest paid on borrowings which were utilized for acquiring shares as Long-Term Investments. 3. Since facts are similar in all appeals, detailed facts in case of Nikhil Investment Co. Pvt. Ltd. are being narrated for sake of convenience. assessee borrowed sum of Rs. 2,548 lakhs from Reliance Capital Ltd. on 31-3-1997 out of which sum of Rs. 2,494.24 lakhs were utilized for acquiring 11,98,000 shares of L&T Ltd. interest payable on such borrowing for assessment year 1998-99 amounted to Rs. 3,74,13,520 vis-a- vis, investment in above shares. same was claimed as deduction under section 36(1)(iii) of Act. Para 8 of assessment order shows that assessee had given note to effect that interest paid on borrowed funds utilized for acquiring shares had been added to cost of purchases of shares and duly reflected in balance sheet. However, claim under section 36(1)(iii) was made since borrowed funds were utilized for business purpose. In course of assessment proceedings, it was found by Assessing Officer that shares were not purchased as stock-in-trade but as Long-Term Investment and income arising from sale of shares was being offered under head 'Capital Gains'. Thus, contention of assessee that borrowed funds were utilized for business purposes was rejected. Further, it was noticed by Assessing Officer that assessee had earned dividend income of Rs. 3,60,86,902 which was exempt from tax under section 10(33) of Act. According to Assessing Officer money was borrowed for purpose of earning dividend income as there was direct nexus between borrowed funds and investment in shares. Hence, interest payment related to dividend income. Consequently, claim of assessee under section 36(1)(iii) of Act could not be allowed. Further, no such claim was allowable under other heads as dividend income was exempt under section 10(33) of Act. Therefore, claim of assessee was disallowed while computing total income of assessee for assessment years 1998-99 as well as 1999-2000. Facts in case of Kankhal Investments & Trading Co. Pvt. Ltd. are similar to facts mentioned above and, therefore, need not be narrated in detail. borrowing on 31-3-1997 from Reliance Capital Ltd. was of Rs. 5,08,00,800 which was utilized for acquiring 2,44,000 shares of L&T Ltd. interest on borrowing was of Rs. 76,20,116 which was claimed as deductions under section 36(1)(iii) of Act but same was disallowed for both years for reasons given in preceding para of this order. 4. matter was carried in appeal before ld. CIT(A) before whom it was contended that assessee was engaged in business of investment in shares and, therefore, interest on borrowed funds was allowable as deduction under section 36(1)(iii) of Act. It was further submitted that investment was not made for earning of dividend income. Merely because investment in shares resulted into dividend income would not render interest paid on borrowing as having been incurred for earning of dividend income, which was exempt from tax under section 10(33) of Act. 5. contention of assessee was rejected by ld. CIT(A) by holding assessee could not be said to be engaged in business of investments as shares were acquired not as stock-in-trade but as investments. It was further held that interest related to earning of dividend income which was exempt from tax under section 10(33) of Act and consequently, same was disallowable under section 14A of Act. Aggrieved by same, both assessees are in appeal before Tribunal. 6. ld. counsel for assessee, Mr. Mistri, has vehemently assailed orders of ld. CIT(A) and Assessing Officer by contending that activity of holding of investments can constitute business of assessee and per se it cannot be said that such activity would never constitute business of assessee. He drew our attention to provisions of section 23A of Indian Income-tax Act of 1922 (Act of 1922). He contended that Legislature was well aware of expression 'Business of holding of Investments'. Therefore, it would be incorrect to say that one cannot engage itself in business of holding of investments. In support of same, he also relied on judgment of Apex Court in case of CIT v. Distributors (Baroda) (P.) Ltd. [1972] 83 ITR 377. Particular attention was drawn to page 383 where Apex Court distinguished earlier decision in case of Bengal & Assam Investors Ltd. v. CIT [1966] 59 ITR 547. Further reliance was placed on other decision of Apex Court in case of CIT v. Amalgamation (P.) Ltd. [1997] 226 ITR 188 at page 207 to buttress his argument that company can be said to be engaged in business of holding investments. Further reliance was placed on following Tribunal decisions: 1. Golak Investments Ltd. [IT Appeal No. 4050 (Mum.) of 1998, dated 10-6-2004]. 2. Meghraj Financial Services (I) (P.) Ltd. [IT Appeal No. 6563 (Mum.) of 1997, dated 9-2-2004]; and 3. Velocity Trading (P.) Ltd. [IT Appeal No. 7719 (Mum.) of 2004, dated 8- 2-2005]. 7. Proceeding further, it was submitted that assessee has carried out this activity in systematic and organized manner by investing money in shares of various companies from time to time. He drew our attention to page 47 of paper book to point out that investment is not restricted to shares of L&T Ltd., but investment has been made in shares of more than 25 companies. It was also pointed out by him that dividend income from shares of L&T Ltd. was only Rs. 71,88,000 out of total dividend income of Rs. 3.6 crores and, therefore, Assessing Officer has wrongly assumed that entire interest related to entire dividends. It was further submitted that investment was not made to earn dividend income but to have controlling interest in Larsen & Toubro Ltd. so that it may have its say in policies of that company. dividend declared by L&T Ltd. was always meagre one and, therefore, there was no question of investing money for earning dividend income. He placed on record chart showing dividends received from various companies to point out that dividend income in case of L & T Ltd. was much less than 3 per cent of investment. According to him, no prudent man would invest borrowed funds at higher rate of interest for earning nominal rate of dividend. In fact, investment was only made to earn profits in future by investing money as prudent businessman and, therefore, lower authorities were not justified in holding that interest paid related to earning of dividend income alone. 8. In course of hearing, query was raised from Bench as to how t h e deduction could be allowed under head 'Profits & Gains from Business/Profession' particularly when neither of receipts from such business was assessable under such head. It was clarified to him that in business of holding of investments in shares, receipts were either by way of dividends or sale proceeds of shares. Both receipts were not assessable under head 'Profits & Gains from Business/Profession' but were assessable either under head 'Income from other sources' or under head 'Capital Gains'. Thus, computation of income under head 'Profits & gains of business or profession' did not arise. 9. Faced with such query, it was submitted that assessee cannot lose t h e statutory deduction which is otherwise allowable under section 36(1)(iii) merely because receipts from such business are not assessable under head 'Profits & Gains from Business/Profession'. Reliance was placed on judgment of Hon'ble Supreme Court in case of CIT v. Rajendra Prasad Moody [1978] 115 ITR 519 wherein it was held that deduction under section 57 was allowable even where there was no dividend income. Proceeding further, it was submitted that assessee had other incomes like interest on debentures and interest on loans and, therefore, such deduction could be allowed against such receipts. Reference was made to Schedule 'J' to point out that interest on debentures was Rs. 239 lakhs for assessment year 1998-99 and Rs. 787 lakhs for assessment year 1999-2000. Proceeding further, it was also pointed out that Assessing Officer had made mistake in observing that interest was added to cost of purchase of shares. He drew our attention to Page 56 of paper book to show that such interest was not added to cost of purchases. He also pointed out that in assessment year 1999-2000, Assessing Officer had disallowed same amount of interest even though interest paid on borrowing was much lesser on account of re-payment of loan. interest paid on borrowing was much lesser on account of re-payment of loan. Hence, disallowance in assessment year 1999-2000 be rectified accordingly. Finally, it was prayed by him that deduction under section 36(1)(iii) may be allowed in respect of interest paid on borrowed funds. Alternatively, it is pleaded that interest paid should be allowed to increase cost of purchase. 10. On other hand, ld. D.R., Mr. Ravindra Kumar, vehemently supported order of ld. CIT(A) by contending that assessee cannot be said to carry on business of holding of investments in view of Supreme Court judgment in case of Bengal Assam Investors Ltd. (supra) wherein, it was held that no one could make business of investing. According to him, but for section 23A of Act of 1922, there cannot be any business of holding investments. Under Act of 1961, there is no such provision and, therefore, concept of business of holding investment is no more available under Act. object clause of Memorandum of Association by itself is not relevant. Proceeding further, it was submitted that merely because earning of dividend was lower than interest paid, it cannot be said that provisions of section 28 of Act would apply. investment is not made only for earning dividend income but also is made with object of earning income on sale of shares in future. He tried to convince us by giving example of investment in immovable property where return by way of rent is always lesser than interest rate prevailing in market. object of investor is to make profits when prices of property increase by lapse of time. He also relied on decision of Apex Court in case of Rajendra Prasad Moody (supra) wherein court held that deduction in respect of interest paid was allowable under head 'Income from Other Sources' even where no dividend was declared. It was emphasized by him that quantum of dividend was immaterial. Proceeding further, it was submitted that expenditure connected with source of income can be considered while computing income from that source if permitted by law but same cannot b e adopted against receipts from another source of income. Further, no deduction is allowable where investment is made to have controlling interest in other company. Reliance was placed on decision of Tribunal in case of Everplus Securities & Finance Ltd. v. Dy. CIT [2006] 101 ITD 151 (Delhi). Proceeding further, it was submitted that interest paid cannot be allowed to be added to cost of shares as there is no such provisions to support alternate plea of assessee's counsel. Reliance was also placed on decision of Tribunal in case of Kamu Metals (P.) Ltd. [ITA No 7211 (Mum.) of 2003], copy of which has been placed on record for proposition that in such cases no deduction under sections 30 to 43D can be allowed as receipts are chargeable to tax either under head 'Capital Gains' or under head 'Income from Other Sources'. Proceeding further, it was submitted that even assuming that assessee was in business of holding of investment then dividend income arising from such business is exempt under section 10(33) of Act and, therefore, expenditure related to such income cannot be allowed under section 14A of Act. 11. In reply, it was submitted by Mr. Mistri that in case of Bengal & Assam Investors Ltd. (supra), question before court was whether dividend income was assessable under section 10 or 12 of Act of 1922 and t h e court was never concerned with issue whether assessee was carrying on business of holding of investment. Such question, on contrary, was directly answered by Supreme Court in case of Distributors (Baroda) Ltd., in favour of assessee. Further, in case of Amalgamations Ltd., provisions of section 23A of 1922 Act were not considered and yet it was held that assessee was engaged in business of holding of investments. Regarding section 14A, it was submitted that onus is on department to prove that expenditure related to exempted income. No such onus has been discharged. Regarding decisions of Tribunal in case of Everplus Securities Ltd. (supra), it was submitted that decision of Supreme Court relied on by him were not cited before Bench. Regarding decision of Tribunal in case of Kamu Metal (P.) Ltd. (supra), it was submitted that no finding was given regarding business of holding investments. 12. Rival submissions of parties have been considered carefully. At outset, we are in agreement with legal contention that in appropriate case, company can be said to be engaged in business of holding investments inasmuch as Legislature itself recognized such legal position by enacting section 23A of Act of 1922. This aspect got judicial recognition from Apex Court in case of Distributors (Baroda) Ltd. (supra). In that case, following question was referred for opinion of Hon'ble High Court: question was referred for opinion of Hon'ble High Court: 'Whether, on facts and circumstances of case, Tribunal was justified in holding that assessee-company is company whose business consists mainly in dealing in or holding of investments within meaning of clause (i) of second Explanation to section 23A of Income-tax Act, 1922?' High Court considering facts of case held that assessee was not engaged in business of holding investments. On appeal to Hon'ble Supreme Court by CIT, Apex Court held that company can be said to be engaged in business of holding investment if such activity refers to real, substantial and systematic or organized course of activity carried on for set purpose such as earning profits. Reference can be made to following observations of Their Lordships at page 383 of 83 ITR:- 'This Court in Bengal and Assam Investors Ltd. v. Commissioner of Income-tax came to conclusion that individual who merely invests in shares for purpose of earning dividend, does not carry on business and that only way he can come under section 10 of Act is by converting shares acquired by him into stock-in-trade, i.e., by carrying on business of dealing in stocks and shares. In that case this Court was considering whether dividend income of assessee-company therein could be considered as business income under section 10 of Act. Therein this Court was not considering scope of section 23A. But all same, in that case this Court proceeded on basis that no one can make business of investing. But then section 23A speaks of business of 'holding of investments'. We were told by counsel for assessee that that expression is incongruous one and that we should following decision of this Court in Bengal and Assam Investors Ltd. hold that there is nothing like business of 'holding of investments'. We feel unable to accede to that contention. We cannot say that Legislature did not know its own mind when it used that expression in section 23A. We must give some reasonable meaning to that expression. No part of provision of statute can be just ignored by saying that Legislature enacted same not knowing what it was saying. We must assume that Legislature deliberately used that expression and it intended to convey some meaning thereby. expression 'business' is well-known expression in income-tax law. It means, as observed by this Court in Narain Swadeshi Weaving Mills v. Commissioner of Excess Profits Tax: 'some real, substantial and systematic or organized course of activity or conduct with set purpose'. This is also meaning given to that expression in earlier decisions of High Courts and Judicial Committee. We must, therefore, proceed on basis that Legislature was aware of meaning given by courts to that expression when it incorporated section 23A into Act in 1957. Hence, we must hold that when Legislature speaks of business of 'holding of investments', it refers to real, substantial and systematic or organized course of activity of investment carried on by assessee for set purpose such as earning profits.' However, on facts it was held that assessee was not engaged in business of holding of investments. It is also clear from above observations that earlier decision in case of Bengal & Assam Investors Ltd. (supra) relied on by ld. D.R. was duly distinguished. 13. In case of Amalgamation (P.) Ltd. (supra), High Court held that assessee was in business of holding investments and consequently, remuneration paid to Directors of subsidiary companies were allowable on deduction under section 37 of Act. On appeal, Apex Court (at page 208 o f 226 ITR) observed that High Court was right in pointing out that business of assessee-company was holding of investments. However, on facts, it was held that deduction was not allowable since there was no nexus between expenditure incurred and activity carried on by assessee. 14. Tribunal, Mumbai Benches, in case of Meghraj Financial Services (I) (P.) Ltd. (supra) has also held that company can be said to be engaged in business of holding investments. This view was taken after considering ratio of judgments of Apex Court in case of Distributors (Baroda) Ltd. (supra) and Amalgamation (P.) Ltd. (supra). 15. In view of above discussions, it is held that in law, company can be said to be engaged in business of holding investments if test laid down by Apex Court in case of Narain Swadeshi Weaving Mills v. CEPT [1954] 26 ITR 765 is satisfied. 16. Having held as above, next question for consideration is whether assessee can be said to be engaged in business of holding investments. test laid down by Apex Court in case of Narain Swadeshi Wvg. Mills (supra) is whether some real, substantial and systematic or organized course of activity or conduct was carried on with set purpose. To satisfy such test, facts of each case would have to be seen. mere fact that assessee is authorized to invest in shares or securities by Memorandum of Association and in pursuance thereof, investment has been made, in our opinion, would not be sufficient to satisfy said test. Something more is required. conduct of prudent businessmen must exist. In present case, this aspect was not examined either by Assessing Officer or by CIT(A). claim of assessee was rejected merely on ground that shares were purchased as long-term investment out of borrowed funds. Even assessee nowhere raised such plea before Assessing Officer. It simply explained before Assessing Officer that borrowed funds were utilized for purpose of business. Further, neither statement of facts nor grounds of appeal before CIT(A) suggest that such plea was raised by assessee. Para 3.2 of order of ld. CIT(A) in case of Nikhil Investment (P.) Ltd. (supra) shows that assessee merely submitted that assessee was in business of investments. However, no material was filed before CIT(A) to record such finding. Even before us, there is no material to prove that assessee was engaged in business of holding investment on touchstone of test laid down by Apex Court. only information filed in paper book at Page 47 is that assessee had invested in shares of around 25 companies. But this fact alone does not establish fact that assessee was engaged in business of holding investments. only arguments advanced by ld. counsel for assessee is that dividend declared by L&T Ltd. was insignificant which itself shows that assessee did not invest money for earning dividend income and, therefore, it should be presumed that investment was on account of business consideration. We are unable to accept this contention. investor normally does not invest merely for dividend. It takes into consideration rise in prices of shares in future and that is why such investments are called long-term investments. All good shares are quoted in Stock Exchange at very high prices as compared to Face Value and dividends declared in past are most of time insignificant. Still investor invests money considering facts that (i) Prices may rise and (ii) bonus shares may be issued in future in addition to dividends received. So mere investment in shares by company would not tantamount in business of holding investments. Assessee must prove business considerations for making investment before claiming any deduction under section 36(1)(iii). Even Apex Court in case of Distributors (Baroda) Ltd. (supra) has clearly held that assessee must satisfy test laid down by Apex Court in case of Narain Swadeshi Wvg. Mills (supra). Faced with factual situation of present case, two courses are open to us either to hold that assessee was not engaged in business of investment in absence of any material on record or to restore matter, in interest of justice, to file of Assessing Officer for recording finding in this regard. However, we need not take either of above course since, in our humble opinion, assessee is not entitled to deductions under section 36(1)(iii) of Act even presuming for sake of argument that assessee was engaged in business of holding investments in shares or securities for reasons given hereafter. 17. In our humble opinion, for claiming any deduction under sections 30 to 43D of Act in computing income of assessee, condition precedent is that income from connected receipts is computed under head 'Profits & Gains from Business or Profession'. According to Scheme of Act, all incomes of assessee are to be classified under various heads described under section 14 of Act and then income is to be computed under these very heads in accordance with provisions contained under these very heads. If receipt falls under particular head then, in our opinion, income from such receipt must be computed in accordance with provisions under that very head irrespective of nature of receipts. It would be incongruous to contend that income from receipt is computed under one head and connected expenditure is considered under some other head. In our view, receipts and expenditure having nexus with each other must be considered under one head only. If expenditure incurred by assessee is not allowable under that head then it cannot be allowed even if incurred by assessee. Normally, income from business receipt is computed under head 'Profits & Gains from Business/Profession' but where particular receipt, even though business receipt, falls under any of other heads described in section 14 of Act then, in our humble opinion, receipts and connected expenditure must be taken out from purview of head 'Profits & Gains from Business or Profession' and compute income under relevant head. 18. view expressed by us is fortified by decision of Apex Court in case of United Commercial Bank Ltd. v. CIT [1957] 32 ITR 688. relevant observations of Their Lordships are being reproduced as under: 'Under Indian Income-tax Act, 1922, income of assessee is one and sections 7 to 12 of Act direct modes in which income-tax is to be levied. No one of those sections can be treated to be general or specific for purpose of any one particular source of income; they are all specific and deal with various heads in which item of income, profits and gains of assessee falls. These sections are mutually exclusive and where item of income falls specifically under one head it has to be charged under that head and no other. Income from 'interest on securities' falls under section 8 of Act and not under section 10; it cannot be brought under different head of income, viz., 'profits and gains of business' under section 10, even though securities are held by banker as part of his trading assets in course of his business.' above view was reiterated by Hon'ble Supreme Court is in case of East India Housing & Land Development Trust Ltd. v. CIT [1961] 42 ITR 49 by observing as under: 'Income-tax is undoubtedly levied on total taxable income of taxpayer and tax levied is single tax on aggregate taxable receipts from all sources; it is not collection of taxes separately levied on distinct heads of income. But distinct heads specified in section 6 of Income-tax Act indicating sources are mutually exclusive and income derived from different sources falling under specific heads has to be computed for purpose of taxation in manner provided by appropriate section. If income from source falls within specific head set out in section 6, fact that it may indirectly be covered by another head will not make income taxable under latter head.' 19. In view of above legal position, we are of view that where specific head is provided in respect of particular income, then such income must be computed under that very head irrespective of nature of income. In case of company in business of holding shares, if investment in shares is disposed off then income there from has to be computed only under specific head 'Capital Gains' and this legal position is not even disputed by assessee's counsel and assessee itself has also declared income under head 'Capital Gains'. Further dividend income is also to be computed under specific head 'Income from other Sources' if such income is taxable. Since dividend income is exempt under section 10(33) of Act, question of computing such income does not arise. There is no other receipt arising or accruing to assessee from business of holding investment in shares. Therefore, entire receipts from such business has to be excluded from head 'Profits and gains from business or profession' since such receipts falls under specific heads. Income can be computed only after allowing deductions as provided under head under which income is to be computed. No other deduction is permissible except provided under that head. interest paid on borrowed funds, at most, could be allowed against dividend income if investment is made to earn dividend income. contention of assessee is that investment was not made to earn dividend income. Therefore, such deduction could not be allowed even against dividend income. Even otherwise, such income being exempt question of deduction against dividend income becomes academic. interest paid as per contention of ld. counsel for assessee, could relate to profits arising from sale of investments since main object was to hold investments. Since income arising from sale of investment has to be computed under head 'Capital Gains', deduction has to be allowed only in accordance with provisions specified under head 'Capital Gains'. Legislature was aware of aspect of inflation of price and, therefore, it made provisions to determine indexed cost of acquisition, which would take care of interest cost also. No separate deduction is allowable under this head in respect of interest paid on borrowed funds. Thus, in our opinion, no deduction is allowable to assessee in respect of interest paid on borrowed funds. 20. It has been contended by ld. counsel for assessee that assessee should not lose statutory deductions under section 36(1)(iii) merely because its income is to be computed under other heads. We are unable to accept such contention. What is to be computed under section 28 is profits and gains of business or profession, which also includes losses. As per commercial or accounting principles, neither profits nor losses from business can be computed unless receipts and expenditures having nexus with each other are taken into consideration. Further, income under section 28 is to be computed in accordance with provisions of sections 30 to 43D as provided in section 29. All provisions contained in sections 30 to 43D provide that deduction shall be allowed in respect of he expenditure or allowance mentioned therein. deduction pre-supposes existence of receipts chargeable under this head. If receipts are to be considered under other heads then, question of deduction under head 'Profits & gains from business or profession' would not arise. As already pointed out receipts and expenditure must go together. We may clarify that receipt may be actual or to be received in future. receipt may be on accrual basis. There may be cases that there is no receipt in one year and it may be received in next year. In such cases, loss may be computed because receipts may be expected in next year. crux of matter is that there must be receipts either actual or on accrual basis before deduction can be allowed there from. Consequently, if receipts, in respect of which expenditure are incurred, are considered under other heads, then question of determining any income under head 'Profits or gains from business or profession' does not arise. Hence, contention of assessee is rejected. 21. Another contention of ld. counsel for assessee is that interest paid should be allowed as deduction against income by way of interest on debentures, which has been assessed on business income. We are unable to accept this contention too. One may carry on various businesses but under scheme of Act, income from each source has to be computed independently though assessable under same head. It is only for convenience that consolidated accounts are maintained. Reference can be convenience that consolidated accounts are maintained. Reference can be made to provisions of section 70 of Act, which reads as under: '70. Set off of loss from one source against income from another source under same head of income - Save as otherwise provided in this Act, where net result for any assessment year in respect of any source falling under any head of income under any head of incomes loss, assessee shall be entitled to have amount of such loss set off against his income from any other source under same head.' bare look at above provisions make it clear that income must be computed in respect of each source assessable under same head. If there is loss from one source, same can be set off against income from other source assessable under same head. Let us explain it through example. company may carry on business of dealing in shares as broker as well as on its own account. In eyes of law, dealing in shares as broker is one source o f income while dealing in shares on its own account is another source of income. In such cases, assessee may earn gross profit of Rs. 50,000 from purchase and sale of shares on its own account with assistance of borrowed fund on which interest of Rs. 1,20,000 is paid. Thus there would be net loss of Rs. 70,000. On other hand, income from brokerage business may be computed at Rs. 1,00,000. After setting off loss, net income for business would be Rs. 30,000. However, such set off is not permissible as per provisions of section 73 as loss on sale of shares will have to be considered as speculation loss, which can only be carried forward to next year. To avoid such situation, assessee cannot plead that income from dealing in shares be taken at Rs. 50,000 and deduction on account of interest on borrowed funds be set off against brokerage income. Thus, it cannot declare loss from brokerage at Rs. 20,000 and income from dealing in shares at Rs. 50,000 and net income from business at Rs. 30,000. In eye of law, it will have to compute in respect of each source of income and thus there will be loss of Rs. 70,000 from dealing in shares and profit of Rs. 1,00,000 from brokerage business. Under section 70, assessee can set off such loss but such provision is subject to other provisions of Act and, therefore, such loss cannot be set off as per provisions of Explanation to section 73. In view of above discussions, it has to be held that assessee is not entitled to deduct interest payment from interest income from holding of debentures as there is no nexus between borrowed funds and investment in debentures. Admittedly, borrowed funds were utilized for purchase of shares of L&T Ltd. and, therefore, interest paid cannot be set off against income by way of interest on debentures. 22. It has also been submitted by ld. counsel for assessee that in case of Nikhil Investment Co. (supra), Assessing Officer has disallowed interest at same amount in both years which is factually incorrect. This may be by way of inadvertent mistake and, therefore, need verification. 23. In view of above discussion, orders of ld. CIT(A) in all cases are upheld on this issue subject to rider that Assessing Officer shall rectify mistake if assessee's contention is found to be correct after verification. 24. next issue relates to ad hoc disallowance of expenses being attributable to exempted income by way of dividend. After hearing both parties, we find that this issue is covered in favour of assessee by decision of Special Bench in case of Punjab State Industrial Development Corpn. Ltd. v. Dy. CIT [2006] 102 ITD 1 (Chd.) wherein it has been held no ad hoc disallowance can be made in such cases. Respectfully, following same, orders of CIT(A) are set aside on this issue and consequently, disallowance sustained by him are hereby deleted. 25. next and last issue arising from appeals of both parties pertaining to assessment year 1999-2000 relates to computation of book profit under section 115JA. This issue has not been pressed before us by ld. counsel for assessee and, consequently, ground raised by assessee in this regard is dismissed. 26. In result, appeals of assessee are partly allowed. *** KANKHAL INVESTMENTS & TRADING CO. (P) LTD. v. ASSISTANT COMMISSIONER OF INCOME TAX