2021 (2) TMI 1366

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.... law: (1) Whether on the facts and circumstances of the case and on the grounds raised, the Tribunal's conclusion that the Assessing Officer's observations amounted to recording of dissatisfaction as regards the disallowance voluntarily made by the Appellant as contemplated under Section 14A of the Act, is perverse? (2) Whether on the facts and circumstances of the case and on the grounds raised, the Tribunal ought to have held that no disallowance was warranted under Section 14A of the Act? (3) Whether on the facts and circumstances of the case and on the grounds raised, the Tribunal was right in remitting the issue of computation of disallowance under section 14A to the Assessing Officer for arriving at ....

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....ord. Before proceeding further, it is apposite to take note of Section 14A of the Act: Section 14A (1) For the purposes of computing the total income under this Chapter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under this Act. (2) The Assessing Officer shall determine the amount of expenditure incurred in relation to such income which does not form part of the total income under this Act in accordance with such method as may be prescribed, if the Assessing Officer, having regard to the accounts of the assesee, is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation....

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....4A of the Act, there has to be a pay out and return of investment or a pay back is not such a debit item. [See: WALFORT SHARE AND STOCK BROKERS (P) LTD SUPRA as well as MAXOP INVESTMENTS LTD SUPRA]. In the instant case, the assessee has admittedly not incurred any expenditure. This case pertains to income on dividend, which by no stretch of imagination can be treated to be an expenditure to attract the provisions of Section 14A of the Act. In view of aforesaid enunciation of law by the Supreme Court, the first substantial question of law framed by this court is answered in favour of the assessee and against the revenue. 10. Learned counsel for parties, have fairly admitted that in case this court frames a substantial question of la....