2009 (8) TMI 750

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....der of the Tribunal confirming the order issued by the Commissioner of Income-tax under section 263 of the Income-tax Act, 1961, directing the Assessing Officer to make proportionate disallowance in respect of expenditure incurred on items of income which do not form part of total income under section 14A of the Income-tax Act. We have heard senior counsel Sri Sarangan appearing for the appellant.....

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....ed under section 263 the assessee filed an appeal before the Tribunal which dismissed the appeal. The appellant has come before us in this appeal mainly contending that under CBDT Circular No. 11 dated July 23, 2001, concluded assessment could not be reopened for the purpose of disallowance under section 14A of the Income-tax Act The senior counsel appearing for the appellant contended that the as....

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....r issues. So much so the Tribunal took the view that assessment has not been concluded as on the date the Commissioner passed order under section 283 and so much so circular does not bar proceedings for disallowance under section 14A. We are of the view that the Tribunal rightly held that an assessment pending finalization after remand by the first appellate authority in appeal filed by the assess....

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....ation of assessment for the purpose of pro rata disallowance under section 14A only when time limit for modification of assessment by the original authority or revisional authority is over. In other words the circular applies only to cases where assessment otherwise cannot he modified by any authority under the provisions of the Act There is no dispute that amendment is retrospective and on the me....