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2019 (6) TMI 483 - DELHI HIGH COURTDisallowance u/s 14-A - the underline investment was for strategic purposes - HELD THAT:- The Income Tax Appellate Tribunal (ITAT) rejected the Revenue’s appeal on the ground that income derived through strategic investments, i.e. for the purpose of maintaining minimum or what is deemed to be commercially feasible holding in a subsidiary entity, is exempt. This was based upon the previous understanding of the law. It was in these circumstances that this Court framed the question of law which it did. In Maxopp Investment Ltd. v. CIT [2018 (3) TMI 805 - SUPREME COURT] , the question – which this Court had formulated in these appeals, was answered. The answer to the question of law framed by this Court, therefore, has to be in the affirmative. It is apparent from a reading of the facts in the appeal that the CIT(A) formed an opinion based upon diverse reasoning, having regard to the facts of each case, regarding the nature of expenditure and especially whether it was a one-time investment opportunity availed of by the assessee. This is relevant in the context of assessee’s assertion that in fact no expenditure was incurred while investing in the mutual funds that yielded substantial income. As to whether in fact no expenditure was incurred or attributable at all, in these circumstances, it becomes a factual controversy requiring further hearing and scrutiny. On this aspect, therefore, the Court is of the opinion that the task is better performed by the ITAT. In view of the above discussion, the question of law is answered in favour of the Revenue, but subject to the factual findings recorded above. The matter is remitted to the ITAT for further hearing and findings on the substantive aspect with regard to attributability of expenditure to dividend income earned through the mutual funds in which the assessee invested.
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