TaxTMI 
TaxTMI 
2012 (8) TMI 965
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....5/- u/s 14A of the Income Tax Act, 1961 for the reason that though the Income Tax Appellate Tribunal in its order has not found itself in agreement with the Assessing Officer on the issue, it has not specifically given relief for this addition without appreciating the fact that once the order of the CIT(Appeals) and Assessing Officer is set aside and restored back to the file of the Assessing Officer with specific directions to make a fresh decision, addition disputed in the appeal does not subsist and in lieu thereof fresh decision has to be taken in accordance with the direction of the Tribunal contained in their order. 1.2 That having set aside and restoring the matter Income Tax Appellate Tribunal is not required to give independent ....
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....d Rule. 4. That the learned CIT(Appeals) has accordingly erred in confirming additional disallowance of Rs. 9,03,892/-. 5. That the above Grounds of Appeal are without prejudice to one another. 6. That the appellant craves permission to add, alter, amend, vary or delete one or more grounds of appeal on or before the date of hearing." 2. The facts of the case are that for the year under consideration, the assessee filed the return disclosing total income of ₹ 2,27,85,704/-. Original assessment was completed on 31st October, 2007 at the total income of ₹ 3,11,76,157/- vide order under Section 143(3). The assessee's main source of income was income from capital gains. The Assessing Officer disallowed the proportionate ex....
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....e was in fact earned or not during the relevant year. As per this judgment of Hon'ble Apex Court, in the present case also, it is not relevant as to whether any dividend income was received by the assessee or not and what is the amount of dividend income. Any expenditure relatable to investment activity has to be construed as expenses incurred for earning dividend income and the same cannot be allowed as per section 14A but for working out the same, it is not proper to calculate the same on the basis of capital gain earned by the assessee because even if these investments were not sold in the present year and as a result no capital gain would have been earned, expenses relatable to investment activity are to be disallowed on the basis that ....
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.... Less : Relief allowed by CIT(A)-depreciation (-) 13,70,000 4,00,80,858 Less : Amt. already disallowed under Rule 8D (-) 3,83,580 Add : U/s 14A, as discussed above (+) 14,11,915 Revised loss (-) 3,90,52,523 Income/(Loss) from speculation business To be carried forward (as per order u/s 143(3)) (-) 27,67,567/- Income under the head capital gain Long term capital gain 2,64,44,315 Short term capital gain 4,31,93,754 (+) 6,96,38,069 (as per order u/s 143(3) Income from other sources As per order u/s 143(3) (+) 2,48,945 Assessed income (+) 3,08,34,491" 5. At the time of hearing before us, it was pointed out by the learned counsel that while computing the income in the assessment order dated 28.12.2010, ....
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.... of which is already reproduced by us in paragraph No.3 above, has held that the proportionate disallowance out of expenses by the Assessing Officer was not justified and disallowance should be worked out only as per Section 14A read with Rule 8D, the Assessing Officer worked out the disallowance under Section 14A read with Rule 8D but, at the same time, he started the computation as per loss, assessed in original assessment, which was after disallowance of proportionate expenses. Thus, in effect, in the fresh assessment again, proportionate expenses of ₹ 45,73,144/- were disallowed, which is clearly not justified. Since the Tribunal has already deleted the proportionate disallowance, we direct the Assessing Officer to delete the disa....