JOINT COMMISSIONER OF INCOME TAX (OSD), CENTRAL CIRCLE 2(1), MUMBAI, MUMBAI vs. GATEWAY DISTRIPARKS LTD, RAIGAD

ITA 2432/MUM/2025Status: DisposedITAT Mumbai21 July 2025AY 2016-17Bench: SHRI NARENDRA KUMAR BILLAIYA, ACCOUNT MEMBER, SHRI ANIKESH BANERJEE (Judicial Member)1 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the amendment to Section 14A, inserting an Explanation, is prospective and not retrospective. Following precedents, the Tribunal ruled that disallowance under Section 14A should only be made on investments that actually yielded exempt income.

What were the facts?

The revenue appealed against the CIT(A)'s order deleting a disallowance of Rs. 1,99,54,828 made by the AO under section 14A. The assessee had suo motu disallowed Rs. 59,50,496, representing 0.5% of investments that yielded dividend income. The AO applied Rule 8D(2)(iii) to the entire investment portfolio, leading to a higher disallowance.

What were the issues?

Whether the amendment to Section 14A by the Finance Act, 2022, with its explanatory provision, is retrospective or prospective in nature, and whether disallowance under Section 14A is applicable on investments not yielding exempt income.

Which sections of the Income-tax Act were involved?

Section 14A,Section 143(3),Section 139(1),Section 115JB,Section 8D(2)(iii)

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Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI

Before: SHRI NARENDRA KUMAR BILLAIYA, ACCOUNT MEMBER & SHRI ANIKESH BANERJEE

For Appellant: Shri Ashok Kumar Jain
For Respondent: Shri Arun Kanti Datta – CIT DR
Hearing: 17/07/2025Pronounced: 21/07/2025

Per Anikesh Banerjee (JM):

The instant appeal of the revenue was filed against the order of the Learned Commissioner of Income Tax (Appeal)-40, Mumbai [hereinafter called, ‘Ld. CIT(A)] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) for Assessment Year 2016-17, date of order 28/01/2025. The impugned order was emanated from the order of the Learned Assistant Commissioner of Income-tax,

2 ITA 2432/Mum /2025 Gateway Distriparks Ltd Circle-1(1)(2), Mumbai [in short, the “Ld. AO”] passed under section 143(3) of the Act, date of order 30/12/2018. 2. The revenue has taken the following grounds of appeal:- “1) Whethe

The order continues below.

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