2022 (7) TMI 898

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....e admitting total loss at (-) Rs 1,91,29,508/-. Subsequently, the assessee filed revised return of income on 30.11.2014 declaring total loss of Rs.1,43,53,566/-. The return was processed u/s 143(1) of the I.T. Act. Subsequently, the case was selected for scrutiny and the statutory notices were issued to the assessee. During the course of assessment proceedings, the Assessing Officer noted from the balance sheet that the assessee company has investments to the tune of Rs.228,71,96,925/- as on 31.3.2014. He, therefore, asked the assessee to explain as to why the provisions of section 14A should not be applied. Rejecting the various explanations given by the assessee and applying the provisions of section 14A r.w.Rule 8D, the Assessing Officer....

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....9;ble Delhi High Court in the case of Cheminvest Ltd., reported in (2015) 378 ITR 33(Del.) has held that section 14A will not apply where no exempt income iss received or receivable during the relevant assessment year" Respectfully following the Hon'ble ITAT decision in the above mentioned case, the addition made by the Assessing Officer deleted since there is no dividend income during this assessment year". 4. Aggrieved with such order of the learned CIT (A), the Revenue is in appeal before the Tribunal by raising the following grounds of appeal: 1. The CIT (A) erred in deleting the disallowance u/s 14A of Rs.1,66,03,554/- 2. The CIT(A) erred in ignoring CBDT's Circular No.5 of 2014 dated 11.02.2014, ....

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....ts. 8. Any Other Ground that may be urged at the time of hearing". 5. We have heard the rival arguments made by both the sides and perused the records. We find the Assessing Officer in the instant case made addition of Rs.1,66,03,554/- by invoking the provisions of section 14A r.w. Rule 8D. We find the learned CIT (A) deleted the addition the reasons of which are already reproduced in the preceding paragraphs. We find the Finance Act 2022 has drastically amended the provisions of section 14A and a Coordinate Bench of the Tribunal has held the amendment to be retrospective in nature i.e. w.e.f. 1.4.1962. We, therefore, in the interest of justice deem it fit and proper to restore the issue to the file of the Assessing Officer with....

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....income of the assessee. 8. In appeal, the learned CIT (A) deleted the addition by observing as under: "6.3 I have carefully considered the assessment order and submissions of the appellant. The appellant submitted that, the Assessing Officer has taken the reserves as positive by working out year end but it should be as per the date of advances, the reserves are negative. Further, this amount was taken as loan and the same was repaid within the year. Therefore, reliance is placed upon the CBDT Circular No. 19/2017, dated 12th June, 2017 which was stated as under: Section 2(22)clause (e) of the IT Act, 1961(the Act) provides that "dividend" includes any payment by a company, not being a company in which the public are sub....