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TMI Blog2014 (3) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee's appeals raises two issues, which we shall take up in seriatim. The first issue relates to an addition in the sum of Rs.4,04,445/-, not disclosed per the return of income. The sum and substance of the assessee's case is that the income under reference is on RRB tax-free bonds, carried over from the past (invested in out of his own capital). The Assessing Officer (A.O.) in fact initially considered the interest income not returned by the assessee at Rs.5,12,216/-, i.e., inclusive of interest of Rs.1,05,283/- on Public Provident Fund (PPF), again tax-free, which though stood excluded by him on the assessee exhibiting the nature of the receipt to that extent, i.e., as being interest on PPF account. The assessee's investments as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The same is thus clearly accounted for. The transfer of the income to the capital account is irrelevant in view of its disclosure (in accounts), particularly when its nature is not in dispute. Rather, though the accounting treatment is neither relevant as to the character of the income - which is contractual, nor determinative of its tax status, the fact of its being tax free explains its direct transfer to the capital account, i.e., rather than being routed through profit and loss account. We, accordingly, finding no merit in the Revenue's case, direct deletion of the balance, impugned sum of Rs.4,04,445/-. 4.1 The second issue being agitated by the assessee is in respect of disallowance at Rs.2,61,278/- u/s.14A read with rule 8D of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y (Rs.5.31 lacs); assistance charges (Rs.3.20 lacs); office expenses (Rs.0.12 lacs); and bank charges (Rs.0.04 lacs), so that it was not possible to accept that no expenditure had been incurred by the assessee toward the holding, acquisition or disposal of investments, income from which does not form part of the total income, placing reliance on the decisions in the case of Asst. CIT vs. Citicorp Finance (India) Ltd. [2007] 108 ITD 457 (Mum) (refer para 2.3 of the impugned order). 4.2 The assessee has before us placed reliance on a number of orders by the tribunal. The law in the matter being clear and unambiguous, besides being explained at length by the hon'ble courts, we do not consider it necessary to dwell on the authorities cited. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disregard of the merits of the assessee's case, i.e., without showing the assessee's failure to prove its claims. Why, it has itself not made any disallowance qua interest on investment in PPF, which is tax-exempt, and which would only be on the basis of no case for the same being made out. 4.3 Under the circumstances, we only consider it fit and proper to restore the matter back to the file of the first appellate authority, who shall decide in accordance with the law per a speaking order after hearing and allowing opportunity to both the parties. The matter being principally factual, i.e., whether (and to the extent) any expenditure stands incurred by the assessee in relation to the investment in shares which yields tax exempt income, wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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