That is how it is supposed to work.The TV does not return audio to the receiver. It returns only when both the input and return audio are connected to the ARC port via single cable.
So connecting PC to HDMI 1 and receiver to HDMI 2 ARC won't work.
I have 3 HDMI ports on my TV. HDMI 2 port is connected to my xbox, HDMI 4 is connected to my computer. HDMI 3 (ARC) is connected to the ARC port of the receiver.
"TV audio" is the input selector on the receiver. HDMI ports have to be manually selected on the TV depending on which input I want to connect to.
Edit:
One advantage of connecting the sources to the TV instead of the receiver is that the receiver need not be on say, if I am browsing Hifivision on my computer connected to the TV. Most of the issues faced by receivers are HDMI card related. I feel safer using only the ARC port of the receiver and other connections directly to the TV. My TV is connected to a UPS and hence less prone to electrical fluctuations.
Last edited: