ACIT., CIRCLE-5(1), HYDERABAD vs. ENGENRIN HYDRO POWER LIMITED, HYDERABAD

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ITA 828/HYD/2024Status: DisposedITAT Hyderabad04 February 2026AY 2016-17Bench: SHRI G. MANJUNATHA, HON’BLE (Accountant Member), SHRI RAVISH SOOD, HON’BLE (Judicial Member)1 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that Section 14A applies only when there is income in relation to which expenditure is incurred. Since the assessee earned no exempt income, the disallowance made by the Assessing Officer was incorrect. The amendment to Section 14A by the Finance Act, 2022, is prospective and not applicable to the assessment years in question.

What were the facts?

The Revenue appealed against the deletion of disallowance made under Section 14A. The assessee had made investments in subsidiaries but claimed no exempt income was earned, hence no expenses were incurred in relation to such income. The Assessing Officer disallowed expenses under Section 14A r.w. Rule 8D.

What were the issues?

Whether disallowance under Section 14A can be made in the absence of any exempt income earned by the assessee, and the applicability of the Finance Act, 2022 amendment to Section 14A.

Which sections of the Income-tax Act were involved?

Section 14A,Section 115JB,Section 270A

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Income Tax Appellate Tribunal, Hyderabad “A” Bench, Hyderabad

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