2013 (2) TMI 42

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t the remand open. 2. After hearing both the sides we frame the following question of law: - "Whether the Tribunal was right in law in restoring the issue of allocation of interest expenditure and financial charges with the direction to the assessing officer to follow the decision of the Special Bench of the Tribunal in the case of Venkateshwara Investment & Finance Pvt. Ltd.?" 3. The assessee is a company engaged in finance and investment business. While completing the assessment, the assessing officer noted that the assessee derived income from the activity share dealing and from loans and advances. He, therefore, took the view that the interest and financial charges incurred by the assessee should be bifurcated between the two a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....res or dealing in investments, the interest payable on such borrowings has to be allowed as deduction u/s 36(1)(iii). Such interest cannot be allocated among different kinds of business activities. Accordingly, the claim of the appellant is accepted and the apportionment on interest and financial charges made in the assessment order is deleted." 5. The Revenue carried the matter in appeal to the Tribunal and one of the grounds taken was that the CIT (Appeals) "erred in deleting the disallowance of proportionate interest of Rs. 3,27,55,572/- and holding the speculative business as business income". The Tribunal referred to an order of a Special Bench of the Tribunal in the case of Dy. CIT v. Venkateswar Investment & Finance (P.) Ltd. [200....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ess of a company is and there is nothing seriously wrong in the Tribunal's direction that the assessing officer may keep in view those guidelines. 7. We do not think that the assessee can really object to the point taken by the Revenue that it should be an open remand without any strings attached. At the same time, there is no need for alarm since the Tribunal has not decided any issue of fact or law but has only directed the assessing officer to "keep in view" the ratio laid down in the order of the Special Bench of the Tribunal (supra). Even so, the apprehension of the Revenue that the direction of the Tribunal may tie the hands of the assessing officer cannot be said to be entirely unfounded. We accept the general proposition that whi....