TMI Blog2010 (12) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the Tribunal was justified in saying that the facts have to be clarified before the assessing officer while proceeding with the matter as directed by CIT. All cases relied upon by the appellants doesnot applies to the facts of the present case and the Tribunal has appreciated the case on hand in accordance with the provisions of section 14-A including the proviso to section 14-A. Accordingly, the substantial questions of law are answered in favour of the revenue. - ITA No. 40-43/2009 - - - Dated:- 24-12-2010 - Manjula Chellur, B.V. Nagarathna, JJ. A. Shankar and M. Lava, Advs., for the Appellant M.V. Sheshachala, Adv., for the Respondent JUDGEMENT The following substantial questions of law arise for our consideration. 1. Whether the Tribunal was justified in law in holding that the order passed by the Commissioner is valid and within the powers under section 263 of the Act on the facts and circumstances of the case? 2. Whether the Tribunal is justified in holding that the proviso to section 14 A of the Income Tax Act does not apply to the revisionary powers under section 263 of the Income Tax Act? 3. Whether the Tribunal failed to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grieved by the same, the appellants-assessees are before us. 7. According to the appellants-assessees, the Tribunal again failed to hold the impact of proviso to section 14 A of the Act which clearly indicates non-application of the said proviso to section 14 A for any assessment year prior to 2001-02. According to the appellants' counsel the language of the proviso is very clear and unambiguous, therefore, the Tribunal failed to appreciate that nothing can empower the assessing officer to pass an order enhancing assessment or reducing the refund already inside and the action of the CIT passing an order under Section 263 was not justified. He further contends that the Commissioner of Income Tax can act under section 263 of the Act only when the order passed by the assessing officer is erroneous and prejudicial to the interest of the revenue. In the absence of any error in the order of assessment by the assessing officer by allowing the interest expenditure rightly, there was no justification for the Commissioner to invoke his powers under section 263 by reviewing the orders of assessing officer. When the view expressed by the assessing officer was also possible view, there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or reduce a refund already made or otherwise increase the liability of the assessees under section 154 for any assessment year beginning on or before 1.4.2001. 12. In the case of CIT, Madras, vs Indian Bank Limited, the question was whether expenditure or allowance must be necessarily capable of producing taxable income. It was held there is nothing in the language of section 10 of Income Tax Act from which it cannot be fairly implied that an expenditure or allowance falling within the section must fulfill some other condition before it can be allowed. The respondent-bank - assessees in the course of its business had invested large sums in securities including securities the interest on which was exempt from tax, profits and losses on the purchase and sale of such securities were duly taken into account while computing the business income of the assessees. It was held that the interest paid by the respondent-assessees on monies borrowed from its various depositors had to be allowed in its entirety under section 10(2)(iii) of the Indian Income Tax Act of 1922 and there was no warrant for disallowing a proportionate part of the interest referable to monies borrowed for the purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... questioned before the High Court and the High Court by its earlier order dated 24.1.2008 remitted back the matter to the Tribunal to consider the case of the assess so far it relates to computation of expenditure under section 14-A of the Act. 16. Subsequent to the remand, the Tribunal after hearing parties held that order of the CIT under section 263 is dt.29.12.99 and proviso to the section 14-A was inserted with retrospective effect from 11.5.2001. Therefore, said proviso does not apply to the facts of the assessees. So far as on facts of the present case are concerned, the assessment year is 1995-96. Order under section 263 is dt.29.12.1999. Though Section 14-A came to be inserted by Finance Act of 2001 with effect from 1.4.1962 proviso came to be inserted by finance act of 2002 with retrospective effect from 11.5.2001. Therefore, as on the date of orders of CIT under section 263 proviso to section 14-A was not even in existence. Therefore, the Tribunal was justified in saying proviso to section 14-A does not apply to the facts of the assessees case. 17. As far as the contentions of the assessees on facts are concerned, the Tribunal is the final fact finding authority. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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