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Issues involved: Appeals and cross objections related to assessment years 1999-2000 and 2002-2003.
Assessment Year 1999-2000: The Revenue appealed against relief allowed in disallowance u/s.14A, while the assessee's cross objections were on the same point. The AO disallowed interest expenditure and part of expenses relatable to dividend income. The CIT(A) allowed partial relief. The Tribunal referred to the case of ITO vs. Daga Capital Management Pvt. Ltd. and directed the AO to compute the disallowable amount as per guidelines laid down by the Special Bench, ensuring it does not exceed the original disallowed amount. The Revenue's appeal against the addition of repairs and maintenance expenses was dismissed based on a previous Tribunal decision in favor of the assessee. The assessee's cross objection challenging reopening u/s.147 was not pressed and dismissed. Another ground related to deduction u/s.80HHD was treated as infructuous due to the dismissal of the Revenue's second ground. The issue of charging interest u/s.234A, 234B, and 234C was disposed of accordingly. Assessment Year 2002-2003: The Revenue and the assessee's cross objection both dealt with disallowance u/s.14A, similar to the previous year. The matter was remitted back to the AO for fresh decision following the Special Bench guidelines. The Revenue's appeal against the addition of repairs and maintenance expenses was also dismissed based on the decision for the previous year. The assessee's cross objection raised issues regarding speculation loss and set off of carried forward losses, which were not adjudicated by the CIT(A). These issues were restored to the file of CIT(A) for a decision. Another ground related to deduction u/s.80HHD was dismissed as infructuous. The issue of charging interest u/s.234A, 234B, and 234C was disposed of accordingly. In conclusion, the appeals of the Revenue and cross objections of the assessee were partly allowed for statistical purposes.
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