TaxTMI 
TaxTMI 
2024 (4) TMI 457
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....law and on facts in upholding the action of learned Assessing Officer in computing the total income of the appellant at Rs. 1,15,69,920/- as against the returned income of Rs. 33,17,090/- u/s 143(3) of the Act. 2. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding a disallowance of a sum of Rs. 11,12,486/- by incorrectly invoking section 14A of the Act read with Rule 8D of the Income Tax Rules' 1962. 3. That the learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in upholding a disallowance of a sum of Rs. 71,40,344/- representing interest paid by the assessee by invoking section 40(a)(ia) of the Act. 3.1 That the learned Commissio....
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....cing reliance on the decision of the Hon'ble Jurisdictional High Court in the case of Joint Investments Pvt. Ltd. Vs. CIT [372 ITR 694] submits that disallowance u/s 14A read with Rule 8D cannot exceed exempt income. 4. On the other hand, the Ld. DR submits that an amendment was made by the Finance Act, 2022 to section 14A by inserting a non obstantive clause and an Explanation was inserted clarifying that even the assessee did not earn any exempt income the provisions of section 14A are applicable and the disallowance can be made, the expenditure for earning exempt income. 5. The Ld. Counsel for the assessee submits that the Hon'ble Jurisdictional High Court in the case of DCIT Vs. M/s Era Infrastructure (India) Ltd. in ITA No.204/20....
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....der consideration assessee paid interest to Bajaj Finance Ltd. and Religare Finvest Limited and the details of interest paid are placed at page no. 21 of the Paper Book. Ld. Counsel for the assessee referring to page 22 which is the ledger copy of interest account submits that the total interest paid during the year was only Rs. 54,77,288/- and not Rs. 71,40,344/- as disallowed by the AO. 8.1 Ld. Counsel further submits that the recipients of interest have accounted for the interest paid by the assessee as their income and, therefore, in view of proviso to section 201(1) of the Act the assessee cannot be treated as deemed to be an assessee in default in respect of the interest paid for non deduction of tax at source and thus, no disallow....
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....he AO disallowed not only the interest but also processing fee and pre-closure charges treating them as interest for non deduction of TDS. Assessee also produced two certificates issued by Bajaj Finance Ltd. dated 06.05.2013, wherein Bajaj Finance Ltd. certified that assessee has paid interest portion of Rs. 29,05,977/- and 14,97,020/- for the loans obtained by the assessee from them and the interest portion pertains to the FY from 1st April 2012 to 31st March 2013. 11. We observe that the Hon'ble Delhi High Court in the case of CIT Vs. Ansal Landmark Township (supra) held as under: - "9. It is seen that the second proviso to Section 40(a)(ia) was inserted by the Finance Act 2012 with effect from 1st April 2013. The effect of th....
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....h Court held that as long as the payee/resident has filed its return of income disclosing payment received and has also paid taxes on such income the assessee would not be treated as a person in default. 13. In the case of CIT Vs. Dr. Jaideep Kumar Sharma (supra) the Hon'ble Delhi High Court following its decision in the case of CIT Vs. Ansal Landmark Township P. Ltd. (supra) has taken a similar view observing as under: - "4. The ITAT has in the impugned order dated 25th July, 2014 referred to the insertion of the second proviso to Section 40(a)(ia) of the Act by Finance Act, 2012 as discussed by Agra Bench of the ITAT in the case of Rajiv Kumar Aggarwal v. CIT (order dated 29th May, 2013 in ITA No.337/Agra/2013) which in turn f....