TaxTMI 
TaxTMI 
2026 (5) TMI 716
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....(3) of the Income Tax Act, 1961 (hereinafter referred to as the 'the Act') by the Assessing Officer, ACIT, Central Circle-31, New Delhi, (hereinafter referred to as the 'AO') pertaining to Assessment Year (A.Y.) 2023-24. 2. The assessee has raised the following grounds of appeal: "1. On the facts and in the circumstances of the case and in law the Ld. NFAC/CIT(A) erred in - a. determining taxable income at Rs. 6,28,000/- against returned income in a sum of Rs. 2,68,28,06,420/-; b. Rs. 6,28,000/- being the amount of disallowance made u/s 14A r.w.s. Rule 8D of the I.T. Rules, 1962; The above actions being arbitrary, fallacious, unwarranted and opposed to principles of natural justice must be quashed with....
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....Assessing Officer in assessment. The Ld. CIT(A)-30, for reasons stated in para 8 on pages 15 and 16 of the impugned order, has confirmed the addition. It is in this background that the following Grounds of Appeal have been taken in this appeal:- GROUNDS: 3. The Grounds of Appeal are as under:- On the facts and in the circumstances of the case and in law the Ld. NFAC/CIT(A) erred in- a determining taxable income at Rs. 6.28,000/- against returned income in a sum of Rs. 2.68.28.06. 420/- b. Rs. 6.28.000/- being the amount of disallowance made u/s 14A r.w.s. Rule BD of the I.T. Rules, 1962 The above actions being arbitrary, fallacious, unwarranted and opposed to principles of natural justic....
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....P) Ltd. (2019) 112 taxmann.com 322(SC). III. Cheminvest id vs Cif (2015) 61 laxmonn.com 118 (Del) IV. Pr. CIT vs. Reliance Ports and terminal ltd (2070) 114 fowmorn.com 579 (Bom.HC): V. Pr.CIT vs. State Bank of Patiala (2018) 99 taxmann.com 266/3C) VI. CIT vs. Lakhani Marketing Inc. (2014) 226 Taxmann 45 (P&H) VII. CIT vs. Reliance Industries & Power Ltd. (2009) 313 TR 340 VIII. Pr..CIT vs India Gelatine and Chemicals Ltd. (2015) 376 (TR 353/04) IX. ACIT vs. Dhampur Sugar Mill Pvt. Ltd. (2015) 54 laxmann.com 158(AR) & X. CIT vs. Taikisha Engineering India Ltd. (2015) 54 taxmann.com 109/Dell 4.4 The Ld. CIT(A) while agreeing with the ratio of the above said deci....
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....thority or jurisdiction to tamper with the income as declared in the name of Sec.14A of the Act and thereafter proceed to make an addition. His having done so is clearly against the mandate of the Apex Court and so against law. 5.3 The AO also misunderstood and misinterpreted the provision itself calling for a disallowance u/s. 14A of the Act. According to the AO the unquoted investments ought to have produced dividend income and which being exempt attracted the provisions of Sec. 14A of the Act. Both the AO and CIT(A) ignored the fact that dividend income, even if realised by the Appellant during the year was not exempt. The income from dividend was taxable in AY 2023-24 by virtue of amendment to Sec. 10(34) of the Act by the Fina....
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.... the amendment to Section 14A by the Finance Act, 2022, effective from AY 2022-23, disallowance under Section 14A read with Rule 8D is applicable even if no exempt income is earned in the current year. The Ld. CIT(A) further observed that this Explanation clarifies, for the removal of doubts, that the provisions of Section 14A shall apply even in cases where no exempt income has accrued, arisen, or been received during the previous year, but expenditure has been incurred in relation to such income. The relevant extracts of the order of the Ld. CIT(A) are reproduced as under: "8.1 The appellant has primarily submitted that there is no exempt income so sec. 14A is not applicable. The appellant has also placed reliance on several judg....
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.... expenditure has been incurred in relation to such income. The intent of this amendment, as outlined in the Memorandum to the Finance Bill, 2022, is to address situations where taxpayers hold investments capable of generating exempt income, but no such income is earned in a particular year. The amendment ensures that expenditure incurred on maintaining such investments is not deductible, preventing the erosion of the tax base. Though the appellant has demonstrated through submissions that no exempt income was generated in the current year, however, it cannot be ruled out entirely. It is also noteworthy that while dividends are generally taxable post-Finance Act, 2020, the presence of deductions like Section 80P effectively renders certain i....