GA No.672 of 2015 With ITAT No.40 o f 2015 IN HIGH COURT AT CALCUTTA Special Jurisdiction (Income Tax) ORIGINAL SIDE M/S. I.T.C. LIMITED Versus COMMISSIONER OF INCOME TAX, - III, KOLKATA BEFORE: Hon'ble JUSTICE I. P. MUKERJI Hon'ble JUSTICE MD. NIZAMUDDIN Date : 17th September, 2019. Appearance: Mr. J. P.Khaitan, Sr. Adv. Ms. Nilanjana Banerjee, Adv. Mr. P. K. Bhowmick, Adv. Mr. Arunabha Ganguly, Adv. Court : We have taken on record reformulated proposed substantial questions of law arising in this appeal. They are as follows: 1. Whether tribunal was justified in law in directing Assessing Officer to reduce profit eligible for deduction under Section 80-IA of Income Tax Act, 1961 in respect of appellant s captive power undertakings by amount of electricity duty of Rs. 4,10,91,000/-? 2. Whether and in any event, if amount of electricity duty was required to be treated as part of cost for computing profit eligible for deduction under Section 80-IA, such electricity duty had to necessarily form part of market value of electricity generated and captively consumed by appellant? 3. Whether order dated September 12, 2014 in so far as it relates to disallowance of Rs.13,50,73,500/- under Section 14A of Income Tax Act, 1961 read with rule 8D of Income Tax Rules 1962 was passed in violation of principles of natural justice by not hearing assessee on question adjudicated and without taking into consideration all contentions of assessee and tribunal s findings with regard to such disallowance are arbitrary, unreasonable and perverse? 2 4. Whether and in any event, in case where employees perform multiple functions, one of which is handling investments, apportioned salary and expenses offered for disallowance under Section 14A of Income Tax Act, 1961 can be given go by and rule 8D of Income Tax Rules, 1962, can be invoked? 5. Whether tribunal was justified in law in rejecting appellant s working and explanation for disallowance of Rs.37,90,785/- under Section 14A of Income Tax Act, 1961 and in invoking sub- Section (2) of Section 14A and rule 8D of Income Tax Rules, 1962 for disallowance of Rs. 13,50,73,500/- and its purported findings in that behalf are arbitrary, unreasonable and perverse? We do not think that any substantial question of law is raised. Only some questions of law arise which, according to Mr. Khaitan, learned senior advocate, have not been properly appreciated by tribunal. Altogether throwing out appeal might cause injustice to appellant. In those circumstances, we had directed appellant s advocate on record to serve notice on respondent. By consent of parties, we have heard out appeal. On facts and in circumstances of case, we feel that above questions of law should be referred to tribunal. On remand, it shall decide both legal and factual issues arising out of Section 80IA and Section 14A of Income Tax Act, 1961 as contained in said questions and pass reasoned order after hearing parties within six months from date of communication of order. impugned order of tribunal dated 12th September, 2014 is set aside to above extent. appeal (ITAT No.40 of 2015) and stay application (GA No.672 of 2015) are disposed of. (I. P. MUKERJI, J.) (MD. NIZAMUDDIN, J.) cs. I.T.C. Limited v. Commissioner of Income-tax-III, Kolkata