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2015 (5) TMI 810 - HC - Income TaxDisallowance u/s 14A - restoring back the issue to the file of AO for de novo adjudication in light of the provisions of Rule 8D - ITAT deleting the addition made by the AO u/s 14A for the purpose of computing book profit u/s 115JB(f) - Held that - Tribunal had only reiterated in paragraph 8 of the order under challenge the finding on the expenditure as per rule 8D r/w section 14A of the Income Tax Act 1961. In relation to that, the Tribunal held that Rule 8D is not applicable to the A.Y. Under consideration. Hence, applying the provisions of Rule 8D is not justified. The further finding of the Tribunal is only to bring to the notice of the Assessing Officer that he has to abide by clause (f) of Explanation 115JB of the Income Tax Act. In such circumstances, what the Tribunal has done is to invite attention of the Assessing Officer to the orders passed by the Tribunal, Delhi Bench. Beyond this, we do not think that the Tribunal has adjudicated the claim or has accepted the contentions raised before it by either side. In these circumstances and when the Assessing Officer is expected to determine the claim afresh and in accordance with law, we do not see any basis for the apprehension and which is voiced by Mr Ahuja. With this additional clarification, the Appeal does not raise any substantial question of law. - Appeal dismissed.- Decided against revenue.
Issues:
1. Setting aside and restoring back the issue to the file of AO for de novo adjudication in light of Rule 8D. 2. Deleting the addition made by the AO u/s 14A for computing book profit u/s 115JB(f) of the Income Tax Act 1961. Analysis: Issue 1: The first issue revolves around the Tribunal's decision to set aside and restore the matter to the Assessing Officer (AO) for fresh adjudication in light of Rule 8D. The Appellant argued that the Tribunal overstepped by providing specific directions to the AO post-restoration, raising substantial questions of law. However, the High Court clarified that the Tribunal merely reiterated its stance on the applicability of Rule 8D and section 14A for the relevant assessment year. The Tribunal held that Rule 8D was not applicable to the said year, hence not justifiable to apply it. The Court noted that the Tribunal's direction was to remind the AO to adhere to Explanation 115JB of the Income Tax Act, without delving into the merits of the claim. Consequently, the Court found no basis for the Appellant's apprehension, leading to the dismissal of the Appeal. Issue 2: The second issue pertains to the deletion of an addition made by the AO under section 14A for computing book profit under section 115JB(f) of the Income Tax Act 1961. The Appellant contested the Tribunal's decision to delete the addition, arguing it as a substantial question of law. The High Court examined the Tribunal's rationale and found that the deletion was based on the inapplicability of Rule 8D for the assessment year in question. The Tribunal's direction to the AO was to consider clause (f) of Explanation 115JB while determining the claim afresh. The Court emphasized that the Tribunal did not delve into the merits of the contentions raised by either party, but merely guided the AO in line with previous Tribunal orders. Consequently, the Court upheld the Tribunal's decision to delete the addition, dismissing the Appeal. In conclusion, the High Court's judgment addressed the issues raised by the Appellant regarding the Tribunal's directions to the Assessing Officer post-restoration and the deletion of the addition made under section 14A. The Court clarified the Tribunal's role in guiding the AO without adjudicating the claim's merits, leading to the dismissal of the Appeal.
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