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2016 (3) TMI 373 - HC - Income TaxDisallowance made under Section 14A read with Rule 8D - Tribunal setting aside the appellate order and directing the Assessing Officer to redo the disallowance - Held that - The appeal does not involve any substantial questions of law. In the order of remand, the Tribunal did not record any categorical finding on the question of disallowance under Section 14A. The Tribunal merely remanded the matter for the purpose of finding out as to how much of the funds were interest free funds or not. It is not a question of law that could arise for our consideration under Section 260A. - Decided against revenue
Issues:
1. Disallowance under Section 14A of the Income Tax Act, 1961. 2. Reconsideration of interest free funds and borrowed funds available with the assessee. Analysis: 1. The appellant Revenue challenged the Tribunal's decision to set aside the appellate order and direct the Assessing Officer to redo the disallowance under Section 14A. The Tribunal remitted the matter back to the Assessing Officer to determine if investments were made from borrowed funds or interest free funds. The High Court observed that the appeal did not involve any substantial questions of law as the Tribunal did not provide a categorical finding on the disallowance under Section 14A. The Tribunal's decision was based on the need to identify interest free funds, not a legal question under Section 260A. Consequently, the High Court dismissed the tax case appeal. 2. The second issue involved the Tribunal's direction to reconsider the interest free funds, profits, borrowed funds, and exempted income of the assessee. The Tribunal set aside the lower authorities' orders and instructed the Assessing Officer to determine the extent of interest free funds available with the assessee. The High Court noted that the Tribunal's decision was not a legal question suitable for consideration under Section 260A. The Tribunal's remand was based on factual determinations regarding the source of funds used for investments, rather than a legal interpretation. Therefore, the High Court dismissed the appeal, emphasizing that no substantial questions of law were involved in the matter.
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