TaxTMI 
TaxTMI 
2025 (10) TMI 420
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....ok profit under section 115JB of the Act, without appreciating the facts of the case?" 3." The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary." 4." It is, therefore, prayed that the order of Ld. CIT(A) may be set aside and that of the Assessing Officer be restored?" ITA No. 758/Ahd/2025 A.Y. 2018-19 "1." Whether on the facts and in the circumstances of the case and in law, the Ld CIT(A) was justified in deleting the disallowance of Rs. 11,24,74,819/- under section 14A r.w.r. 8D of the Act, without appreciating the facts of the case?" 2." The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary." 3." It is, therefore, prayed that the order of Ld. CIT(A) may be set aside and that of the Assessing Officer be restored?"" 3. The assessee filed its return of income on 01-11-2017 for assessment year 2017-18 declaring total loss of Rs. (-) 2,09,14,530/-. The assessee's case was selected for scrutiny and notice u/s. 143(2) of the Act was issued to the assessee. In response to the notices issued, the assessee filed reply. The Assessing Officer held th....
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....nt by virtue of Finance Act, 2022 to the provisions of section 14A is prospective in nature and would be applicable for AY 2022-23 and onwards or it is retrospective in nature, the Hon'ble ITAT Guwahati in the case of ACIT v Williamson Financial Services Ltd. (2022) 140 taxmann.com 164 (Guwahati Trio) has held it to be retrospective in nature. However, the Hon'ble Delhi High Court in the later decision in the case of PCIT (Central) v. Era Infrastructure (India) Ltd (2022) 141 taxmann.com 289 (Delhi) has held it to be prospective in nature. Similarly, the Hon'ble ITAT. Mumbai has held it to be prospective in nature in the case of ACIT Vs K Raheja Corporate Services Pvt. Ltd. in ITA Nos. 2521 to 2527/Mum/2021." 6.1. We do not find any infirmity in the above order, it is undisputed fact that the assessee has not received any dividend during the Financial Year The Ld. CIT(A) has considered that the amended provisions of Section 144 will be applicable prospectively and relied upon various case laws Therefore, the order passed by the Ld CIT(A) does not require any interference Thus, the Ground raised by the Revenue is devoid of merit and liable to be dismissed. ....
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.... income under thus Act. has not accrued or arisen or has not been received during the previous year relevant to an assessment year and the expenditure has been incurred during the said previous year in relation to such income not forming part of the total income." 2.1.2 The Explanation uses the phrase "and shall be deemed to have always applied in a case" which makes it crystal clear that provisions of Section 14A apply to the case of A.Y. 2017-18 also. 2.2 CBDT CIRCULAR NO. 05/2014 SUPPORTS REVENUE'S POSITION 2.2.1 CBDT Circular No. 05/2014, dated 11.02.2014 clarifies the scope of Section 14A even for years when no exempt income was earned. 2.2.2 Para No. 6 of the said Circular provided: Thus, in light of above, Central Board of Direct Taxes, in exercise of its powers under section 119 of the Act hereby clarifies that Rule 8D read with section 14A of the Act provides for disallowance of the expenditure even where taxpayer in a particular year has not earned any exempt income." 2.2.3 Hence, there is no doubt about the scope of operation of Section 14A even for the year when no exempt income was earned. 2.3 LEGISLATI....
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.... the present amendment has clarified the existing position and scope of Section 14A since its inception in 2001. Such clarificatory amendment was necessitated due to erroneous interpretations. 2.5 CIT(A)'S RELIEF 2.5.1 The scheme of Section 14A read with Rule SD aims to take into ambit those investments from which no exempt income has been earned, yet potential for earning of exempt income "includible" in total income exists. 2.5.2 All the relied cases by the assessee have not considered the impact of the clarificatory and retrospective phrase "deemed to have always been applied". Hence, such judgments are not applicable to the case. 2.5.3 The amendment is crystal clear, clarificatory and thereby, retrospective. 4. PRAYER In view of the above submissions, it is most respectfully prayed that this Hon'ble Tribunal may be pleased to a) RESTORE the order of the Assistant Commissioner in its entirety; b) CONFIRM the disallowance under Section 14A read with Rule SD of Rs. 8,12,90,897/-; c) DISMISS the appeal filed by the assessee. 5. CONCLUSION The clarificatory amendment in Section....