TMI Blog2015 (5) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. If the assessee has not debited any actual expenditure relating to the earning of the exempt income, therefore, the provisions of section 14A cannot be imported into the computation of book profit under section 115JB of the Income Tax Act, 1961. Therefore, even clause (f) of Explanation to section 115JB which refers to those amounts which are debited to the Profit and Loss account, alone can be added to the book profit, cannot apply . Having held that the matter is sent back to the assessing officer for reconsideration and while working out the deduction in terms of section 14A read with Rule-8D, the asssessing officer must take note of clause (f) of Explanation to section 115JB of the I.T. Act, then we do not think that questions 1 and 3 could be entertained. The same clarification as is given in the case of M/s. Essar Teleholdings Ltd. [2015 (5) TMI 810 - BOMBAY HIGH COURT]would govern the present case. The facts and circumstances being identical, we do not think that the appeal should be entertained on question nos.1 and 3 above - Decided against revenue. Interest under section 234B - Held that:- The liability to pay interest would only arise on default and is really i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s contended by Mr.Tejveer Singh that the assessee filed a return of income declaring income of ₹ 7,76,31,388/- under the normal provisions of Income Tax Act, 1961 (for short said Act ) and ₹ 1,23,15,74,564/- under the MAT provisions of section 115JB of the said Act. 3. The assessing officer noted that the assessee had earned dividend income of ₹ 6,42,35,165/- from shares in JSW Steels Ltd. The total investment of the assessee company from which the dividend was receivable has been illustrated in the assessment order. However, the assessing officer noted that the total interest expenses were shown by the assessee at ₹ 49,74,06,913/- during the year and investment to the tune of ₹ 154.47 crores made on 29th March, 2005 was directly related to the loans. After referring to the requisite details the assessing officer concluded that there was direct nexus between the interest on the loan of ₹ 143 crores and investment in the shares of JSW Steels Ltd. For the balance investment of ₹ 205 crores and other interest expenses the nexus could not be established by the assessee, that is why the assessee was called upon to show cause as to why the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantial of law would arise for determination and consideration. 8. We have found from reading of the impugned order of the Tribunal that insofar as the first question is concerned, the relevant facts have been referred in paragraphs 2 and 3 and in paragraph 4 to 6 the findings of the Commissioner and rival contentions have been noted. In paragraph 7 the Tribunal set aside the Commissioner's order in the light of judgment of this Court in the case of Godrej and Boyce Manufacturing Co. Ltd. Vs. Deputy Commissioner of Income Tax (2010) 328 ITR 81 and following that judgment the tribunal directed that the matter is required to be reconsidered by the assessing officer. He shall examine the relevant accounts, the nature of term loans and availability of interest free funds with the assessee. After examining all these details and account, and only if some reasonable disallowance can be adopted that should be worked out and in relation to earning of the dividend. The asssesee was also directed to furnish necessary details and working before the assessing officer. 9. However, the tribunal also noted that by way of additional ground the assessee challenged disallowance under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is a substantial question of law simply because the Tribunal while remanding and restoring the case to the file of the Assessing Officer has given a finding with regard to the course to be adopted after restoration by the Assessing Officer. The Tribunal should not have done this. In such circumstances, the Appeal raises substantial questions of law. We are of the view that the Tribunal had only reiterated in paragraph 8 of the order under challenge delivered on 29th July 2011 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was in tune with the law prevailing on the date on which tax was due and payable. Any further addition in the income by way of amended provisions and which were incorporated subsequently, therefore, does not attract payment of interest as there is no default. 13. Mr.Kaka also invited our attention to section 115JB and particularly, insertion of clause (h) in Explanation (1). That clause reads as under: (h) The amount of deferred tax and the provision therefor. 14. This clause has been substituted by Finance Act, 2008 with restrospective effect from 1st April, 2001. Prior to the same it read as under: 4. Substituted for the portion beginning with the words if any amount referred and ending with the words as reduced by --- by the Finance Act, 2008, w.r.e.f. 1.4.2001. Prior to its substitution, read as under: If any amount referred to in clauses (a) to (g), is debited to the Profit and Loss account, and as reduced by . 15. The Tribunal in this regard noted rival contentions and the admitted facts. It also relied upon and followed the judgment of Hon'ble Calcutta High Court in Emami Ltd. Vs. the Commissioner of Income Tax (2011) 337 ITR 470. 16. In p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, held against the appellant. The matter was carried before the Commissioner of Income Tax (Appeals) and during pendency of appeal the Finance Act, 2001 was amended by the Finance Act, 2002. The effect of amendment, inter alia, was to make an agent, such as the appellant, before the Supreme Court, liable to pay service tax as broadcaster. 19. The Supreme Court noted that the Appellants' appeal pending before the Commissioner was rejected by him on the basis of this amendment. The tribunal also maintained this order and that part of the order passed by the Commissioner was not challenged in appeal. However, the appellant was aggrieved by the fact that the tribunal held it liable to pay interest on the amount which it was required to pay by reason of the 2002 amendment. The assessee contended that once the amendment was brought in, pending the appeal, there was no question of applying section 234B or any analogus provision and payment of interest. It is in that regard that the Hon'ble Supreme Court held as under: 7. In any event, it is clear from the language of the validation clause, as quoted by us earlier, that the liability was extended not by way of clarifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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