REDI PORT LIMITED,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX 3(3)(1), MUMBAI

2. On the facts and circumstances of the case the ld. CIT was not justified in relying on Maxopp Investment Ltd 91 Taxmann.com 154 as the facts of the said case are entirely different are distinguishable from the facts of the appellant’s case. The ld. CIT(A) ought to have given clear finding rather than restoring the mater back to Assessing Officer’s file and directing him to recompute 14A disallowance.

The material on record would show that in an assessment framed u/s 143(3) on 30/11/2016, the assessee has been saddled with disallowance u/s 14A for Rs.42.04 Lacs which is nothing but indirect expense disallowance u/r 8D(2)(iii) which is computed @0.5% of average investments. The plea that no exempt income was earned by the assessee could not find favor with Ld. AO.

Upon further appeal, Ld. CIT(A), relying upon latest decision of Hon’ble Supreme Court in the case of Maxopp Investment Ltd. vs. CIT [2018] 402 ITR 640 (SC) directed Ld. AO to revisit the entire issue of applicability of section 14A by observing as under: - “In view of the judgement of the Hon’ble Supreme Court of India in Maxopp Investment Ltd, as referred to above, the Assessing Officer is directed to revisit the entire issue of applicability of section 14A in this case and recompute the disallowance, if any. This ground of appeal is technically partly allowed.”

It is quite evident from the directions of learned CIT(A) that the entire issue of applicability of Section 14A has already been restored back to the file of the learned Assessing Officer for re-adjudication in terms of cited decision of Hon’ble Supreme Court. Therefore, there would be no occasion for the assessee to be aggrieved and no relief could be granted to the assessee at this stage. Needless to add that the assessee is free to agitate the issue of disallowance u/s 14A before learned Assessing Officer, in any manner.

The assessee’s appeal stand dismissed. Order pronounced on 08th July, 2020.