TaxTMI 
TaxTMI 
2014 (2) TMI 1062
X X X X Extracts X X X X
X X X X Extracts X X X X
....ny assessment was subjected to a proportionate disallowance of Rs.11,28,050/- u/s 14A of the Income Tax Act, 1961 vide order dated 07.12.2006 by the AO u/s 143(3). Against this the assessee came in appeal before CIT(A) who deleted the disallowance made by the AO. The said order was challenged by the Revenue before the ITAT who vide its order dated 19.11.2010 in ITA No-455/Del/2008 restored the issue to the file of the AO. Pursuant to this order the assessee before the AO stated that out of the total receipt of Rs.2,70,36,200/-, Rs.15,35,868/- constituted dividend income exempt from tax. It was stated that the assessee had debited expenses of Rs.2,12,64,917/- against the total receipt. Out of the total dividend income it was stated that Rs.14,48,195/- was on account of shares held in group company TEXMECO. The shares were stated to have been held since 1996-97 and were stated to be acquired out of business funds as such no further disallowance on facts was warranted. However, the explanation offered by the assessee was not accepted by the AO who made disallowance of Rs.7,76,363/-. 2.1. The facts as emanating from the record in 2008-09 assessment years show that the assessee declare....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ring the course of the appellate proceedings Ld. AR of the appellant attended and submitted that substantial portion of dividend income from one company, namely, TEXMACO Ltd. and the investment in TEXMACO was made in the year 1996-97. The dividend received from the said company trough cheques, which goes directly into the Bank. Furthermore, there is no outstanding, nor any expenditure on loan has been claimed. For balance dividend income, it has been contended that it is negligible as compared to total income of the assessee, which is to the tune of RS.2.70 Crores. It has been further argued that AO in the assessment order has not been able to show any expenditure incurred in relation to earning the tax free income, rather, he has made disallowance on the assumption and presumption that some expenses have been incurred directly in relation to exempt income and made disallowance on adhoc basis, which is not the intention of the Law. I have considered the finding of the AO and written submission of the AO. As per direction, finding of Hon'ble Delhi High Court in the case of MAXOPP Investment Ltd, the AO is required to determine the amount of expenditure on the basis of reasonable and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e appellant has also submitted his working of Rs.74,856-94. In my considered opinion, opportunity was given to AO to make comment the working of the appellant, but, he has decided to stick on his own working made during the course of assessment proceedings. So, after putting my reliance on the judgment of Hon'ble ITAT in the case of TSL Defence Technologies Pvt. Ltd. and Delhi High Court in the case of Chandra Build Com. Ltd. , the matter is remitted back to the file of AO with direction that AO should verify the claim of the appellant and allow after proper verification as to how much expenses are directly attributable to earning the dividend income. Grounds No. 1, 2 and 3 of appeal are partly allowed." 3.3. Similarly considering the facts arising out of the appeal for 2009-10 assessment year, the CIT(A) took into consideration the written submissions filed by the assessee decided the issue in the following manner:- "7.1. I have gone through the finding of the AO in the assessment order and written submission of the ld. AR of the appellant. In this regard again there is dispute with regard to amount of disallowance. Assessee has made voluntary disallowance of Rs.91,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the amended provision while deciding the appeal filed by the assessee may either confirm, reduce, enhance or annul the assessment. The power to set aside has been withdrawn by the Legislature. In the light of the afore-mentioned legal position, we are called upon to decide whether the CIT(A) has given a finding and merely restored the issue to the AO for verification of the facts. The finding of the CIT(A) on which heavy reliance is being placed by the Revenue has been extracted by us in the earlier part of this order. A bare perusal of the same shows that he has mentioned two decisions in passing namely Chandra Buildcom Ltd. and TCL Defence Technologies and also addresses the requirements which the AO is required to fulfill in terms of the direction of the jurisdictional High Court in the case of Maxopp and thereafter relying upon the afore-mentioned two decisions he has restored the issue to the AO. Evidently the finding of the CIT(A) cannot be said to be a finding which has addressed the facts of the case. The ratio of the decision has not been culled out nor has a similarity with assessee's case been demonstrated. Merely placing reliance on decisions without the afore-mentioned....