Director Of Income Tax(International Taxation v. Abu-Dhabi Commercial Bank Ltd

ASN IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.969 OF 2010 Director of Income Tax(International Taxation) Vs. Abu-Dhabi Commercial Bank Ltd. ....Appellant. ...Respondent. Mr. Suresh Kumar for the Appellant. Mr. Atul K. Jasani for the Respondent. CORAM : DR. D.Y. CHANDRACHUD & M.S. SANKLECHA, JJ. 19 MARCH 2012 PC: This Appeal arises from a decision of the Income Tax Appellate Tribunal dated 14[th] February 2007, the Assessment Year in question being Assessment Year 1997-98. The Appeal by the Revenue raises the following substantial questions of law : “1.Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in upholding the order of the CIT (Appeals) in allowing exemption of interest u/s. 10(15) on gross basis; 2Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in allowing exemption in respect of gross interest instead of net interest; 3Whether after the insertion of Section 14A, any expenditure relating to earning of exempt income can be permitted?” 2The Appeal is admitted on the aforesaid questions and is taken up for hearing and final disposal by consent. 3During the course of the hearing, Counsel appearing on behalf of the Revenue and the Assessee have agreed that the decision of the Tribunal on Issue No.7 may be set aside by consent and restored to the file of the Tribunal for reconsideration. Issue No.7 as recorded by the Tribunal reads as under: “Issue No.7 is regarding direction of learned CIT(A) to the Assessing Officer to grant exemption to the assessee u/s. 10(15) on gross receipts ignoring the facts that it amounts to double deduction of expenses i. e. as a part of exemption of gross tax free interest and also u/s. 36(1)(iii) and 37(1). This issue has been raised by the revenue as per ground No.3 in A.Y. 1997-98”. 4Accordingly, we set aside by consent the decision of the Tribunal on Issue No.7 and restore the proceedings back to the Tribunal for fresh consideration keeping in view and considering the applicability of the Judgment of this Court in Godrej and Boyce Mfg. Co. Ltd. Vs. Deputy Commissioner of Income Tax and another [2010] 328 ITR 81(Bom.)In that view of the matter, it is not necessary for this Court to express any opinion on the questions of law raised in the present appeal. The rights and contentions of the parties are kept open. 5The appeal is accordingly disposed of. There shall be no order as to costs. ( DR.D.Y. CHANDRACHUD, J ) ( M.S. SANKLECHA, J. )