2015 (6) TMI 1180

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.... Mrs. N. Banerjee [Pal], Adv. ORDER The Court : The subject matter of challenge in the appeal is a judgment and order dated 5th October, 2006 pertaining to assessment year 2002-03 passed by the learned Tribunal. The following substantial questions of law were formulated at the time of hearing of the appeal: "(a) Whether in the facts and circumstances of the case the Income Tax Appel....

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....n u/s. 37(1) of the Act. The Tax Auditors had identified the said expenses as falling within the ambit of section 40A(9) but had stated such expenditure to be allowable in accordance with the decision of the Hon'ble Calcutta Tribunal in case of DCIT - Vs - Chloride Industries Ltd. reported in 76 ITD 1. The Ld. CIT(A) also confirmed the disallowance made by the A.O. At the time of hearing, it was b....

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....ore, need not be decided. The second question, it appears, was decided initially by the assessing officer on the basis of a thumb rule. The assessing officer opined as follows: " The assessee has earned exempt dividend income amounting to Rs. 13,43,74,967/- on a total investment of Rs. 906,93,00,000/- but has not disallowed the expenditure incurred for earning the said dividend in the comput....

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.... the above proportionate management expenses amounting to Rs. 41,87,086/- (Rs.311,05,00,000/- Rs. 9982,44,000 x Rs. 13,43,74,967) is being disallowed u/s. 14A." The CIT(A) upheld the order of the assessing officer, but the Tribunal was of the opinion that "this issue is squarely covered by various decision of this Tribunal, where it has been held that possibility of direct and indirect expenses....