2026 (5) TMI 1393

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....018-19. The word 'Act' herein this order would mean Income Tax Act, 1961. 2. The only issue seminal to the present appeal of the Revenue is regarding the addition of Rs. 7,63,61,817/- made by the ld. AO under section 14A of the Act and its deletion by the ld. CIT(A). As per brief factual matrix of the case that the assessee, is a company, had filed return of income on 30/03/2019 declaring total loss of Rs. 2,68,88,631/-. The assessee company was noted to have made investment in shares of Rs. 384,46,38,000/- as on 31.3.2018, the income from which is exempt from tax. After considering the submissions of the appellant, the ld. AO concluded that the assessee was required to have identified expenses qua exempt income. Hence, based on the fact....

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.... taxmann.com 176. 6. We have noted that the case laws relied upon by the ld. DR are purely on distinguished on facts. We are of the considered view that no disallowance u/s. 14A is permissible in this case, considering the fact that there was not exempt income disclosed by the assessee. We have also noted that it is settled law now that the explanation to section 14A which can be invoked even in cases where there is no exempt income is prospective and not retrospective in nature. We have further noted the decision of this tribunal in the case of M/s HCL Training & Staffing Services Private Limited, in ITA No.7383/Del/2025 AY 2017-18 holding as under :- "......4. The ld. Counsel for the assessee argued that the invocation of sect....