Hon'ble Supreme Court Matter remanded to HC for "de novo consideration" when HC without making any interpretation u/s. 14A allowed assessee's claim of deduction of expenses incurred in earning exempted expenses

supreme court of india

Commissioner of Income-tax - III

vs.

RK BK Fiscal Services (P.) Ltd.

S.H. KAPADIA, CJ.

AND MADAN B. LOKUR, J.

CIVIL APPEAL NO. 5999 OF 2012

AUGUST 23, 2012

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ORDER

Heard learned counsels of both the sides.

Delay Condoned.

Leave Granted.

The assessee claims deduction for expenses incurred to earn amounts which are exempted from tax. The case involves the interpretation of Section 14A of the Income Tax Act, 1961 [for short, 'the Act']. The Kolkata High Court has said that no substantial question of law arises in this case. There is no judgment of the Kolkata High Court on the interpretation of Section 14A of the Act. Section 14A has been introduced in the Act to say that expenses incurred to earn the amount, which is exempted from tax, would not be entitled to a deduction. This point has not been considered in the impugned judgment of the Kolkata High Court.

In fact, the impugned judgment only refers to minutes of the order. In the circumstances, the said minutes are set aside and the matter is remitted to the High Court for de-novo consideration in accordance with law.

The civil appeal is, accordingly, allowed.

No order as to costs.