DCIT, CIRCLE -25(1), NEW DELHI vs. TECHNO TREXIM (INDIA) PVT. LTD., NEW DELHI

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ITA 5889/DEL/2019Status: DisposedITAT Delhi05 September 2022AY 2015-164 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s deletion of the disallowance. It noted that the Delhi High Court, in a recent decision, held that amendments to Section 14A clarifying its application even without exempt income were prospective.

What were the facts?

The Revenue appealed the deletion of disallowance under Section 14A read with Rule 8D by the CIT(A). The assessee argued that no exempt income was received, and the CIT(A) followed the Delhi High Court's decision in Cheminvest Limited.

What were the issues?

Whether disallowance under Section 14A read with Rule 8D is applicable when no exempt income is earned, and if amendments to Section 14A are retrospective.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, DELHI BENCH “H” NEW DELHI

Before: SHRI CHALLA NAGENDRA PRASAD & SHRI [Dr.] B.R.R. KUMAR

For Appellant: Shri Vivek Bansal, Advvocate
For Respondent: Shri M. Baranwal
Hearing: 05.09.2022

आदेश / O R D E R PER C. N. PRASAD, J.M.

1.

1, This appeal is filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals)-9, New Delhi [hereinafter 1

I.T.A.No.5889/Del/2019 referred to CIT (Appeals)] dated 11.04.2019 in deleting the disallowance under section 14A read with Rule 8D of the Act for the Assessment Year 2015-16.

2.

At the outset, the ld. Counsel for the assessee submits that during the assessment year the assessee did not receive any exempt income and the ld. CIT (Appeals) deleted the disallowance. Following the decision of the Hon’ble Delhi High Court in the case of Cheminvest Limited Vs. CIT (378 ITR 33). The ld. Counsel further submits that in a recent decision, the jurisdictional High Court in the case of PCIT Vs. Eros Infrastructure (India) Ltd. In ITA. 204/Del/2022 dated 20.07.2022 held that the Amendment brought in by the Finance Act, 2022 to the provisions of section 14A of the Act clarifying even if there is no exempt income the provisions of section 14A read with Rule 8D have application was held to be applicable only prospectively.

3.

The ld. DR supported the order of the Assessing Officer.

4.

Heard rival submissions perused the orders of the authorities below. We observe that the ld. CIT (Appeals) deleted the disallowance made under section 14A of the Act for the reason that the assessee did not receive any exempt income during the assessment year under consideration. The ld. CIT (Appeals) followed the decision of the Hon’ble Delhi High Court in the case of Cheminvest Limited Vs. CIT (supra). We further observe that recently the Hon’ble Delhi High Court in the case of PCIT Vs. Eros Infrastructure (India) Ltd. (supra) and the Hon’ble Delhi High Court following the decision of apex court in the case of Sedco Forex International Drill. Inc Vs. CIT (2005) 12 SCC 717 and the decision of the Hon’ble Supreme Court in the case of M.M. Aqua Technologies Ltd. Vs. CIT in Civil Appeal Nos. 4742 and 4743 of 2021 (dated 11.08.2021) held that the Amendment to section 14A of the Act w/o for removal of 2

I.T.A.No.5889/Del/2019 doubts cannot be presumed to be retrospective. Thus, we do not see any infirmity in the order passed by the ld. CIT (Appeals) in deleting the disallowance made under section 14A read with Rule 8D of the Act. Grounds raised by the Revenue are rejected.

5.

In the result, appeal of the Revenue is dismissed.

Order pronounced in the open court on : 05/09/2022

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