TaxTMI 
TaxTMI 
TaxTMI 
2023 (1) TMI 63
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 665 of 2021 in SMW(C) No. 3 of 2020, wherein the period from 15.03.2020 till 28.02.2022 shall stands excluded for the purpose of limitation as may be prescribed under any general or special laws in respect of judicial or quasi judicial proceedings. Further, it is held that in case where limitation would have expired during the period of 28.02.2022, notwithstanding actual balance period of limitation remaining all persons shall have limitation period of 90 days from 01.03.2022 and in the event, the actual balance of limitation remaining w.e.f. 01.03.2022 is greater than 90 days, that longer period shall apply. 3. The Ld. AR did not object seriously to the application for condonation of the delay in filing the appeal by the Revenue. 4. We have heard rival submissions of the parties on the issue of condonation of the delay. In view the decision of the Hon'ble Supreme Court in Miscellaneous Application (supra), the appeal filed is within limitation and accordingly same is admitted for adjudication. 4.1 As identical grounds have been raised by the Revenue in all the three appeals, for brevity, the grounds of appeal for assessment year 2016-17 are only reproduced as under : 1. "Wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ome-tax Act, 1961 (in short 'the Act') along with other cases of 'K Raheja Group', the assessment for assessment year 201516 and 2016-17 have been completed u/s 153A r.w.s. 143(3) of the Act on 23.12.2019 and 27.12.2019 respectively. The assessment for AY 2018-19 has been completed u/s 143(3) of the Act on 27.12.2019. In all the three assessments, one of the disallowance made is u/s 14A of the Act. It was contested by the assessee that there was no exempt income and therefore no disallowance should have been made in view of various judicial decisions relied by the assessee. However, the Ld. Assessing Officer following Rule 8D of the Income-tax Rules, 1962 made the disallowance. The said disallowance have been deleted by the Ld. CIT(A) in all the three years. 5.1 In assessment year 2016-17, the assessee challenged the disallowance mainly on three grounds. Firstly, no satisfaction has been recorded by the Ld. Assessing Officer. Secondly, merely because expenditure was debited to profit and loss account does not entitle for disallowance u/s 14A. Thirdly, no disallowance u/s 14A of the Act should have been made if no exempt income was earned. The Ld. CIT(A) in assessment year 2016-17 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at the FAA was not justified in upholding the order of the AO. Hence, reversing his order we decide the effective ground of appeal in favour of the assessee." 6.1 Further, the relevant para of the order of the Tribunal for AY 2014-15 is also reproduced as under : "9. The assessee has raised identical ground of appeal as raised in appeal AY 2013-14, which we have allowed. Therefore, following the rule of consistency, the appeal for AY 2014-1 is allowed with similar direction. To make it more clear the Assessing Officer directed to restrict the disallowance u/s 14A to suo-moto disallowance of Rs.7,05,027/- offered by assessee." 6.2 Further, the Ld. Counsel of the assessee submitted that Hon'ble Delhi High Court in the case of PCIT v. Era Infrastructure (India) Ltd. ITA No. 204/2022 & CM APPL. 31445/2022 has held that amendment made to Finance Act, 2022 to section 14A of the Act has been held prospective. For ready reference, relevant amendment to section 14A of the Act is reproduced as below: "Amendment of section 14A. In section 14A of the Income-tax Act. - (a) in sub-section (1), for the words "For the purposes of", the words "Notwithstanding anything to the contrary ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 6.5 The ground No. 3 to 7 relates to the addition of income u/s 5 of the Act under regular provisions as well as under provisions of section 115JB of the Act. The facts in brief qua the issue-in-dispute are that the assessee company being a holding company advanced certain sum to its subsidiary specifying rate of interest @ 12.5 per cent per annum. However, the subsidiary went into deep losses and discontinued to pay the interest, accordingly, the assesee company also discontinued to credit accrual of interest on said advances, it was the contention of the assessee that net worth of the subsidiary company was negative and it was unable to pay back its liability and therefore, assessee discontinued to accrue the interest on said advances. The Ld. AO reject the contention of the assessee and made addition of Rs.2,86,37,549/- for AY 2016-17, observing as under: "8.2.1 During the year under consideration, the assessee company has not charged interest on the Inter-corporate Deposit given by it to its subsidiary company. This decision of the assessee does indicate any business exigency. it gathered from the record that the borrower before passing the resolution of non-payment of inte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....;s appeal for A.Y. 2009-10. 8.2.6 If the assessee would not have advanced such loan, the assessee would have less liability of its own loan and that way also the assessee would have paid less amount of interest on its loan. This action of the assessee has direct bearing on its taxable income & tax thereof. 8.3 In view of the fact mentioned above, the submission of the assessee is not accepted. The average rate of ICD during FY 2015-16 is @ 12.50 %, the same interest rate would be applicable for current year. Accordingly, the interest that has been absolved would be taken in the term of the real income of the assessee and added to the total income of the assessee, such interest income of the assessee is computed as under:- Month Opening balance Amount Received Closing Balance Rate of Interest P.A. Interest P.M. Apr-15 22,91,00,38 - 22,91,00,388 12.5 23,86,462 May-15 22,91,00,38 - 22,91,00,388 12.5 23,86,462 Jun-15 22,91,00,38 - 22,91,00,388 12.5 23,86,462 Jul-15 22,91,00,38 - 22,91,00,388 12.5 23,86,462 Aug-15 22,91,00,38 - 22,91,00,388 12.5 23,86,462 Sep-15 22,91,00,38 - 22,91,00,388 12.5 23,86,462 Oct-15 22,91,00,38 - 22,91,00,3....