TMI Blog2018 (1) TMI 1231X X X X Extracts X X X X X X X X Extracts X X X X ..... net interest income and therefore, there would not have been any disallowance under Section 14A. To our mind, it is an apparent mistake committed by the Tribunal which deserves to be rectified. Therefore, we recall the order of the Tribunal - MA No 39/Ahd/2012, 240/Ahd/2012, 328/Ahd/2013, (Arising out of CO No. 262/Ahd/2011), (Arising out of CO No. 355/Ahd/2004), (Arising out of ITA No. 475/Ahd/2004) - - - Dated:- 23-1-2018 - Shri Pramod Kumar, Accountant Member And Shri Rajpal Yadav, Judicial Member Assessee by : Shri Vartik Choksi, AR Revenue by : Shri Mudit Nagpal, Sr DR ORDER Per Rajpal Yadav, Judicial Member The present three Miscellaneous Applications are directed at the instance of the assessee pointing out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned CIT(A) has erred in law and on facts in reducing the disallowance of interest from ₹ 3,72,88,743 to ₹ 1,17,91,794/- made by the Assessing Officer 5. The brief facts of the case are that, according to the learned Assessing Officer, the assessee has earned dividend income which is exempt from tax, and therefore, with the help of Section 14A of the Income-tax Act, read with Rule 8D of the Income-tax Rules, he worked out a disallowance of ₹ 3,72,88,743/-. On appeal, learned CIT(A) has held that interest expenditure attributable to investments in shares, which are on the nature of stock-in-trade, has to be excluded and, thereafter, average interest rate of 6.57% is to be considered for calculating quantum of inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed as has been done by Ld. CIT(A). This aspect of the order of Ld.CIT(A) is reversed and the A.O. is directed to compute the interest to be disallowed u/s. 14A @ 6.57% of ₹ 23,38,40,647 (Rs.24,85,91,626 - ₹ 1,47,50,979). This ground is partly allowed. 7. In the result, appeal of the revenue in I.T.A. No.3475/Ahd/2004 is partly allowed. 7. In the Miscellaneous Application, the assessee has raised two fold submissions. It contended that the CIT(A) as well as ITAT, both, failed to consider its arguments that no interest bearing funds were used by the assessee for making investments, which has resulted exempted income. In the next fold of contentions, the assessee contended that it has received total interest income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atent mistake which is apparent from the record, and not a mistake which requires to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinions. It is also pertinent to observe that a Court decides a dispute between the parties. The case can involve decision on facts. It can also involve a decision on point of law. Both may have bearing on the ultimate result of the case. When a Court interprets a provision, it decides as to what is the meaning and effect of the words used by the Legislature, it is the declaration regarding the statute. In other words, the judgment declares as to what the legislature had said at the time of enactment of the provision, the declaration is........ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the computation of disallowable expenditure under the said clause. It is true that the legislature has not given any further indication as to how such amount of expenditure would be ascertained. We would therefore have to apply the reasonable test and interprete the provision as is most likely to give effect to legislative intent for disallowance of expenditure by an assessee for earning income which is not accountable to tax. It is true that investment made by the assessee out of such borrowed funds will continue to be factored in denominator in the formula provided in clause(ii) of sub rule(2) since factor 'C' which forms the denominator refers to average of total assets of assessee as on the first and the last day of the previo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, we recall the order of the Tribunal rendered on ground No.2 of the Revenue s appeal as well as ground Nos. 2, 3, 4 5 of Cross-Objection bearing No.355/Ahd/2004. These grounds are restored for re-adjudication. The order of the Tribunal is modified to this extent. 11. So far as Miscellaneous Application No.39/Ahd/2012 in Cross-Objection No.262/Ahd/2011 is concerned, it relates to determination of amount of penalty imposable under Section 271(1)(c) of the Income-tax Act. Sub-clause (c) of Section 271(1) contemplates that quantification of penalty is depended upon the ultimate determination of income showing the additions for which an assessee could be blamed for evasion of taxes. Therefore, it is consequential in nature. We allow th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
