2024 (3) TMI 432

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....to the Assessing Officer in respect of disallowance to be made u/s. 14A of the Income Tax Act, 1961? (ii) Whether on the facts and in circumstances of the case, the Tribunal erred in not following the judgment of this Hon'ble Court and the order of coordinate bench of the Tribunal of preceding assessment year i.e. Asst. Year 2010-11 rendered on identical facts, while deciding the appeal for Asst. Year 2011-12? 1.1 Tax Appeal No. 82 of 2024 is filed by the assessee under Section 260A of the Act arising out of the order dated 24th March, 2023 passed by the Tribunal in ITA No. 624/Ahd/2016 for Assessment Year 2011-12 raising the following proposed questions of law. (i) Whether on the facts and circumstances of the case, the Tribunal has materially erred in remanding the matter back to the Assessing Officer in respect of disallowance to be made u/s. 14A of the Income Tax Act, 1961? (ii) Whether on the facts and in circumstances of the case, the Tribunal erred in not following the judgment of this Hon'ble Court and the order of coordinate bench of the Tribunal of preceding assessment year i.e. Asst. Year 2010-11 rendered on identical facts, while deciding the appeal fo....

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.... on the opening and closing of gross block of fixed assets should be considered. The Ld. AR further submitted that current liabilities and provisions should not be reduced from the opening and closing stock of current assets. Ld. AR further submitted that if issue of disallowance in respect of Section 14A of the Income Tax Act, 1961 is held in Department's favour the same should be considered. Ld. AR further submitted that the assessee has huge fund of its own and, therefore, the mechanical application under Rule 8D was not proper and justifiable. 8. The Ld. DR submitted that the CIT(A) in respect of invoking of Rule 8D related to administrative expenses has applied 0.5%. The Ld. DR relied upon the Assessment Order. The Ld. DR submitted that the department has challenged this issue in ITA No. 547/Ahd/2016 filed by the Revenue. The Ld. DR submitted that it was upto the assessee to adduce evidence that all the borrowing were used for the purpose of the business and it is the assessee's own surplus funds that were invested in the shares earning exempt income. 9. We have heard both the parties and perused all the relevant material available on record.....

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....owever, by order dated 23rd August, 2023 dismissed the Miscellaneous Applications holding as under. "4. We have heard both the parties and perused all the relevant material available 4. on record. The contention of the assessee/Ld. AR that the Assessing Officer has to confirm the disallowance of administrative expenses under Section 14A to the tune of Rs. 15,00,000/- and dismiss the appeal of the Revenue thereby contending that in earlier Assessment Year i.e. A.Y. 2010-11 the Hon'ble High Court has deleted the disallowance made by the Assessing Officer under Section 14A thereby observing that in a case where assessee was having sufficient funds available with it, more than amount invested for earning the dividend, the disallowance in respect of interest expenditure under Section 14A of the Act read with Rule 8D of the Rules is not permissible. From the perusal of paragraph no. 9 of the order dated 24.03.2023 the contentions of the Ld. AR that no satisfaction was recorded has been taken into account and after taking cognisance of the same, the Tribunal has come to the conclusion that the Assessing Officer has looked into the aspect of element of administrative expenses ....

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....g action of restricting the disallowance of administrative expenses to the extent of Rs. 10.00 lakhs and Rs. 15.00 lakhs for the Assessment Year 2009-10 and 2010-11. It was, therefore, submitted that non-consideration of the direct decision of the coordinate Bench of the Tribunal as well as decision of this Court was nothing but a mistake apparent on the record, which requires to be rectified under Section 254(2) of the Act. It was also pointed out by learned advocate for the petitioner that the Tribunal did not dispose of Ground No. 2 of the assessee's appeal and Ground No. 1 of the Department's appeal and only Cross Objections of the assessee was dismissed by remanding the matter back to the Assessing Officer. It was, therefore, submitted that both the Tax Appeals as well as Special Civil Application are required to be allowed by remanding the matter back to the Tribunal for de novo hearing on merits of the matter. 5. On the other hand, learned senior standing counsel Mr. Karan Sanghani appearing for the Revenue submitted that the Tribunal has rightly dismissed the Miscellaneous Applications as there is no mistake apparent on the record as the Tribunal has remanded the matter ....