CIT v. Thiru Arooran Sugar Ltd.

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The Tax Publishers2020 TaxPub(DT) 3528 (Mad-HC) : (2021) 431 ITR 0347 : (2020) 275 TAXMAN 0428

INCOME TAX ACT, 1961

Section 14A

Where Tribunal having chosen to remand the matter to AO for a fresh consideration, could have avoided qualifying the remand, especially when the questions of law are being raised by both the Revenue as well as the assessee, it would be appropriate to interfere with that portion of the order passed by Tribunal and remand the matter for a fresh consideration to AO to enable him/her to consider the entire matter afresh without, in any manner, curtailing exercise of his/her power as an AO, accordingly, findings/observations made by Tribunal were set aside.

Disallowance under section 14A - Expenditure incurred on exempted income - Remand of matter -

Assessee-company had made investment for the purpose of earning dividend income which was exempt and incurred expenditure in relation to earning of exempted income. AO disallowed the expenses incurred under section 14A by invoking rule 8D of Income Tax Rules, 1962. Tribunal remitted back the issue of disallowance under Section 14A to AO by directing him to exclude own funds in the form of reserve and surplus when the assessee was maintaining mixed bag of funds. Held: As perused the order passed by Tribunal, having chosen to remand the matter to AO for a fresh consideration, could have avoided qualifying the remand, especially when the questions of law are being raised by both the Revenue as well as assessee. Thus it would be appropriate to interfere with that portion of the order passed by Tribunal and remand the matter for a fresh consideration to AO to enable him/her to consider the entire matter afresh without, in any manner, curtailing exercise of his/her power as an AO.

Relied:Maxopp Investment Ltd. v. CIT (2018) 91 Taxmann.com 154 (SC) : 2018 TaxPub(DT) 1403 (SC), CIT v. Tidel Park Limited [TCA.Nos.732 and 733 of 2018 dated 7-7-2020] : 2020 TaxPub(DT) 2875 (Mad-HC), CIT v. Tamilnadu Industrial Development Corporation Limited 2020 TaxPub(DT) 2871 (Mad-HC), M/s. Roca Bathroom Products Pvt. Ltd. v. Pr.CIT (2019) 101 Taxmann.com 395 (Mad) : 2019 TaxPub(DT) 509 (Mad-HC), Pr. CIT v. Moderate Leasing & Capital Services Pvt. Ltd 2018-TIOL-2459-HC-Del-IT] : 2018 TaxPub(DT) 7189 (Del-HC), ACB India Limited (Formerly M/s Aryan Coal Benefications (P) LTD. v. Asstt. CIT (2015) 374 ITR 108 (Del) : 2015 TaxPub(DT) 1966 (Del-HC), Joint Investments Pvt. Ltd. v. CIT (2015) 372 ITR 0694 (Del) : 2015 TaxPub(DT) 1375 (Del-HC), CIT v. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom) : 2009 TaxPub(DT) 1275 (Bom-HC), Beach Minerals Company Pvt. Ltd. v. Asstt. CIT [ITA.No.2110/Mds/2014 dated 6-8-2015] : 2015 TaxPub(DT) 3900 (Chen-Trib), Pr.CIT v. Moderate Leasing & Capital Services Pvt. Ltd. 2018-TIOL-431-SC-IT : 2018 TaxPub(DT) 7185 (SC).

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2012-13

IN THE MADRAS HIGH COURT