2023 (6) TMI 575

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....eferred this appeal. 2. Brief facts of the case are that assessee is a company, filed its return of income for the assessment year 2017-18 on 30/10/2017 declaring loss of Rs. 2,76,89,21,681/- and book loss at Rs. 9,06,60,050/-. During the course of scrutiny, learned Assessing Officer found that the assessee incurred interest expense and at the same time it made investments to the tune of Rs. 4,96,16,65,412/- learned Assessing Officer inferred that the assessee had incurred interest expenditure towards borrowings utilised for the purpose of investment and earning of exempt income and, therefore, by invoking section 14A of the Income Tax Act, 1961 (for short "the Act") read with rule 8D of the Income Tax Rules, 1962 (for short "the Rules") m....

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....ied. 6. We have gone through the record in the light of the submissions made on either side. There are no contrary findings of the authorities to the plea taken by the assessee that during the year under consideration, the assessee did not earn any exempt income. The basis for making the addition that the assessee incurred interest expenditure in respect of the amounts that were used for making investment also. In that process, learned CIT(A) relied upon the amendment to section 14A of the Act by insertion of explanation by Finance Act, 2022 and also to the decision of the Guwahati Bench of the Tribunal, referred above. 7. In the case of Era Infrastructure (India) Ltd., (supra) Hon'ble Delhi High Court considered the effect of amendme....