Binding precedent controls allocation of dividend-related expenditure and retrospective application of section 14A provisions on remand.

Where the dispute is governed by a binding precedent, the appellate order may be set aside and the matter remanded for fresh determination in accordance with that precedent. The questions whether expenditure was allocable to dividend income and whether sections 14A(2) and 14A(3) applied retrospectively were treated as covered by Godrej & Boyce Mfg. Co. Ltd. v. Deputy Commissioner of Income Tax. The Tribunal's order was therefore not allowed to stand, and the matter was restored for reconsideration under the governing law.

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Issues: (i) Whether the expenditure was allocable to the earning of dividend income. (ii) Whether sections 14A(2) and 14A(3) were retrospectively applicable.

Issue (i): Whether the expenditure was allocable to the earning of dividend income.

Analysis: The question was treated as covered by the binding decision in Godrej & Boyce Mfg. Co. Ltd. v. Deputy Commissioner of Income Tax.

Conclusion: The issue was not finally determined by the Tribunal's order and was sent back for reconsideration in accordance with law.

Issue (ii): Whether sections 14A(2) and 14A(3) were retrospectively applicable.

Analysis: The question was treated as covered by the binding decision in Godrej & Boyce Mfg. Co. Ltd. v. Deputy Commissioner of Income Tax.

Conclusion: The retrospective application of sections 14A(2) and 14A(3) was not upheld for the purpose of final disposal, and the matter was restored for fresh decision under the law laid down in that precedent.

Final Conclusion: The Tribunal's order was set aside and the matter was restored to the Assessing Officer for decision in accordance with the governing precedent.

Ratio Decidendi: Where the controversy is governed by an applicable binding precedent, the appellate order may be set aside and the matter remanded for fresh determination in accordance with that precedent.

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