In assessment proceedings, the AO raised a query about dis allowance of expenditure attributable to exempted dividend income u/s 14A. After considering the assessee’s reply, no dis allowance was made u/s 14A, though interest expenditure was disallowed on the ground that it was not for business purposes. This was confirmed by the CIT (A). On appeal by the assessee, the Tribunal remanded the matter to the AO by observing that the AO should reconsider the matter in the light of Daga Capital Management 199 TTJ 289 (SB) (Mum). On appeal by the assessee, HELD:
As the AO had not made any dis allowance u/s 14A, the Tribunal could not have not touched the question of s. 14A and made observations prejudicial to the assessee while remanding the matter. It had no jurisdiction to issue directions to the AO decide afresh on the touchstone of s. 14A and Daga Capital Management Pvt. Ltd. Accordingly, the order of the Tribunal to the extent it directed consideration of applicability of s. 14A was quashed & set aside.
FULL TEXT OF THE JUDGEMENT:
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL NO.1460 OF 2009
Top star Mercantile Pvt. Ltd.
(Formerly, Urvi Chemicals & Allied Industries Ltd) Appellant.
V/s.
The Asstt. Commissioner of Income Tax ..Respondent.
Mr. J.D. Mistri with A.K. Jasani for appellant.
Mr. P.S. Sahadevan for respondent.
CORAM : V.C.DAGA AND J.P.DEVADHAR, JJ.
