TaxTMI 
TaxTMI 
2020 (1) TMI 1141
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....ct in holding that the estimation of expenditure in respect of administrative or financial cost at 5% of dividend income earned by the Assessing Officer in accordance with Section 14A of the Act cannot be disallowed? (ii) Whether the provisions of the Section 14A of the Act r/w Rule 8D of the Income Tax Rules should be made applicable to all pending matters as the same is clarificatory in nature in view of the consistent stands taken by the department? (iii) Whether the Tribunal was correct in holding that the estimated expenditure cannot be treated as book profit under Section 115JA of the Act despite Explanation (f) to Section 115JA of the Act? (iv) Whether the Tribunal was correct in holding that the provision ....
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....aring gross total income of Rs. 2,23,249/-. The assessee declared Rs. 2,06,92,53,033/- as book profit under Section 115JA of the Act. The return was processed under Section 143(1) of the Act resulting in refund of Rs. 10,62,37,618/-. Thereafter a notice was issued under Section 143(2) of the Act. The Assessing Officer by an order dated 31.12.2002 inter alia held that since exempted dividend does not form part of income, the assessee is not entitled to disallowance of proportionate expenses as required under Section 14A of the Act. Accordingly, an addition of Rs. 20,38,002/- was made by the Assessing Officer. The aforesaid order was upheld in appeal by the Commissioner of Income Tax (Appeals). Being aggrieved, the assessee filed an appeal....
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....on 14A of the Act. In support of aforesaid submissions, reliance has been placed on decision of the Supreme Court in 'COMMISSIONER OF INCOME TAX VS. WALFORT SHARE & STOCK BROKERS (P) LTD.', (2010) 326 ITR 1, 'GODREJ & BOYCE MANUFACTURING COMPANY LTD. VS. DEPUTY COMMISSIONER OF INCOME-TAX', (2017) 394 ITR 449 and 'MAXOPP INVESTMENT LTD. VS. COMMISSIONER OF INCOME TAX, NEW DELHI', (2018) 402 ITR 640 (SC)'. It is fairly submitted by the learned counsel for the revenue that substantial question of law Nos.1 and 3 are interlinked. While inviting the attention of this Court to Explanation to Section 115JA of the Act, it is submitted that in the assessee's appeal with reference, to explanation to Section 115JA(c) of the Act namely ITA No.164/2009 ....
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....Court in, PRINCIPAL COMMISSIONER OF INCOME TAX-7 VS. M/S PUNJAB AND SINDH BANK, wherein by placing reliance on the decision of the Supreme Court in MAXOPP INVESTMENT PVT LTD supra, the Delhi High Court held that the assessee had earned the revenue on the shares held as stock in trade only by quirk of fate and held that no substantial question of law is involved. It is further submitted that the Supreme Court had initially granted leave to file an appeal against the aforesaid order. However, the appeal preferred by the revenue was subsequently dismissed. Therefore, in view of law laid down by the Supreme Court in case of MAXOPP INVESMENT LTD, as well as WALFORT supra, the first substantial question of law deserves to be answered in favour....
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....sessing Officer either to reassess under Section 147 or pass an order enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee under Section 154, for any assessment year beginning on or before the 1st day of April 2001. 9. From perusal of Section 14A of the Act, it is evident that for the purposes of computing the total income under this chapter, no deduction shall be allowed in respect of the expenditure incurred by the assessee in relation of the income which does not form part of his total income under the Act. The expenditure, the return of investment and cost of requisition are distinct concepts. Therefore the word 'incurred' in Section 14A of the Act have to be read in the con....