2024 (2) TMI 337

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.... the Income Tax Act (hereinafter referred to as the 'Act'). 2. The assessee in this appeal has taken the following grounds of appeal: "1. For that the Ld. CIT(A) was not justified in confirming the disallowance of Rs. 68,65,91 7/- made by the A.O. by invoking the provisions of sec. 14A r.w. Rule 8D which is over and above the suo-moto disallowance of Rs. 9,39,667/- made by the assessee itself. 2. Without prejudice to the above, Ld. CIT(A) ought to have restricted the disallowance to the extent of Rs. 26,63,953/-, being calculated on the basis of the average value of investment after considering only those investments which had yielded dividend income during the relevant year. 3. For that the Ld. CIT(A) ought to....

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..... 4. The ld. DR, however, has submitted that the newly inserted Explanation to section 14A being clarificatory is retrospectively applicable. He, in this respect, has also relied upon the decision of the Coordinate Guwahati Bench of the Tribunal in the case of 'ACIT vs. Williamson Financial Services Ltd. reported in [2022] 140 taxmann.com 164 (Guwahati-Trib.) 5. We have heard the rival contentions and gone through the record. It has to be observed that earlier as per decisions of the various High Courts of the country, the proposition was laid down that where the assessee has not derived any tax exempt income from investments, then no disallowance is attracted u/s 14A of the Act. Reliance in this respect can be placed on the following....

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....nt year. For the sake of ready reference the newly inserted Explanation to section 14A of the Act, is extracted as under: "14A. [(1)] [Notwithstanding anything to the contrary contained in this Act, for the purposes of] computing the total income under this Chapter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under this Act.] ************************ *********************** [Explanation.-For the removal of doubts, it is hereby clarified that notwithstanding anything to the contrary contained in this Act, the provisions of this section shall apply and shall be deemed to have always applied in a case where the income....