Lld. counsel for the assessee, has submitted that there is no need to remit the matter to the Assessing Officer as the Assessing Officer had not made any dis allowance under Section 14A, except in respect of interest expenditure. He further says that the contention now raised by the revenue does not emanate from the order of the Tribunal. We are not inclined to accept the said contention.
We have noted the observations made by the Assessing Officer while making dis allowance under Section 14A. The Assessing Officer was handicapped, because of failure of the assessee to furnish relevant details and particulars while making the dis allowance. It is clear from the observations made by the Assessing Officer, in the assessment order, that his intention was to segregate and compute the dis allowance to be made of expenses under Section 14A. We may note that in the case of Maxopp Investment Ltd. (supra) also, the issue raised was whether the interest paid on borrowed funds for investing in shares for the purpose of acquiring and retaining a controlling interest therein was allowable under Section 36(1)(iii) and was not hit by Section 14A of the Act. We may, however, clarify that the dis allowance, if any, to be made by the Assessing Officer will not exceed the dis allowance which was made in the original assessment order as reduced by the CIT(Appeals).
IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 28th February, 2012.
ITA 92/2011
CIT Versus MACHINO PLASTIC LTD.
ORDER
SANJIV KHANNA,J: (ORAL)
This appeal by the Revenue under Section 260A of the Income Tax Act, 1961 (Act‟, for short) pertains to assessment year 2001-02. After hearing counsel for the parties, we frame the following substantial question of law:
“Whether Income Tax Appellate Tribunal was justified in deleting the disallowance under Section 14A of the Income Tax Act, 1961?”
2. The assessee is a company and has made investment in equity shares, preference shares and bonds as per details given below:
