TaxTMI 
TaxTMI 
2022 (5) TMI 1327
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....filed the return of income for the assessment year 2016-2017 on 30.11.2016 with returned loss of Rs.78,24,50,827. The case was selected for scrutiny and notice u/s 143(2) of the Act was issued. Reference was made to the Transfer Pricing Officer (TPO) for determination of Arm's Length Price (ALP) of the specified domestic transactions entered into by the assessee. The TPO passed an order u/s 92CA on 30.10.2019 proposing the adjustment of Rs.96,57,60,845. The Assessing Officer (AO) passed a draft assessment order on 23.12.2019 incorporating the TP adjustment proposed by the TPO. In addition, the AO also made an addition of Rs.1,91,49,505 u/s 14A of the Act read with Rule 8D of the I.T.Rules, 1962 and made a disallowance of Rs.5,66,93,000 on a....
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....ated 11.02.2014 stating that the expenses relating to earning of exempt income have to be considered for disallowance irrespective of whether any such income has been earned during the financial year or not. The DRP stated that since the assessee has huge investments in shares and has incurred considerable amount towards legal, professional fees and consultancy fees for managing the shares and portfolio warranting the disallowance u/s 14A of the Act. The AO passed the final order based on DRP directions. 5. Aggrieved, the assessee is in appeal before us. The learned AR reiterated the submissions made before the lower authorities and stated that the assessee has not earned any exempt income during the year. The learned AR also stated that....
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....matter. We also notice that the Co-ordinate Bench of the Tribunal in assessee's own case (ITA Nos.597 and 598/Bang/2019) has held in favour of the assessee on the similar issue. Considering the judgment of the Hon'ble Apex Court and the binding decision of the Co-ordinate Bench of the Tribunal, we are of the considered view that there cannot be a disallowance u/s 14A of the Act when the assessee has not earned any income exempt under the Income-tax Act. We, therefore, direct the AO to delete the addition made on account of disallowance u/s 14A of the Act r.w.r.8D of the I.T.Rules. This ground is allowed in favour of the assessee. 8. The next issue is on the disallowance of deduction u/s 43B of the Act towards interest payment. The assess....
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....ns and perused the material on record. We will look at relevant extract from the provisions of section 43B which reads as follows - "Certain deductions to be only on actual payment. 43B. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of- ************** (d) any sum payable by the assessee as interest on any loan or borrowing from any public financial institution or a State financial corporation or a State industrial investment corporation, in accordance with the terms and conditions of the agreement governing such loan or borrowing, or ************** shall be allowed (irrespective of the previous year in whi....