ACIT, CENTRAL CIRCLE-6(4), MUMBAI, MUMBAI vs INDIABULLS REAL ESTATE LIMITED, DELHI

Income Tax Appellate Tribunal, MUMBAI “C” BENCH : MUMBAI

Before: SHRI B.R. BASKARAN & SHRI ANIKESH BANERJEE

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “C” BENCH : MUMBAI

BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER

ITA No. 1379/Mum/2024 Assessment Year 2020-21 ACIT, Central Circle-6(4) Indiabulls Real Estate Limited, Air India Building, M62 & 63, 1st Floor, Nariman Point, vs. Connaught Place, Mumbai. New Delhi PAN : AABCI5194F (Appellant) (Respondent) For Assessee : Shri K. Gopal, Adv. & Shri Om Kandalkar, Adv. For Revenue : Ms. Madhu Malati Ghosh, CIT-DR Date of Hearing : 07-08-2024 Date of Pronouncement : 08-08-2024 ORDER PER B.R. BASKARAN, A.M :

The Revenue has filed this appeal challenging the order passed by the learned Commissioner of Income Tax (Appeals)-NFAC, Delhi (in short „Ld.CIT(A)‟) and it relates to AY. 2020-21. The only issue urged by the Revenue in this appeal relates to the relief granted by the Ld.CIT(A) in respect ofaddition made by the AO u/s. 14A of the Income Tax Act, 1961 („the Act‟).

We heard the parties and perused the record. The AO noticed that the assessee has made investments, but did not make any disallowance u/s. 14A of the Act. The case of the assessee was that it did not earn any exempt income and hence, no disallowance u/s. 14A

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of the Act is called for. The said contention was rejected by the AO. Accordingly, he worked out the disallowance u/s. 14A r.w. Rule 8D of the Income Tax Rules, 1962 („the Rules‟) at Rs. 23.98 crores.

In the appellate proceedings, the Ld.CIT(A) accepted the above said contentions of the assessee. In support of the above said proposition, the Ld CIT(A) followed the decision rendered by the Hon‟bleBombay High Court in the case of M/s. Nirved Traders Pvt. Ltd., in ITA No. 149 of 2017 and also the decision rendered by the Hon‟ble Madras High Court in the case of Chettinad Logistics (P) Ltd., 80 taxmann.com 221 (Madras)/95 taxmann.com 250 (SC), wherein it was held that the disallowance u/s.14A of the Act is not required to be made when the assessee has not earned any exempt income. The Ld CIT(A) noticed that an amendment has been brought by the Statute in Section 14A of the Act w.e.f. 01-04-2022, making the disallowance u/s.14A of the Act mandatory, even if no exempt income is earned. The Ld.CIT(A) held that the said amendment is prospective in nature and in this regard, he relied upon the decision rendered by the Hon‟ble Delhi High Court in the case of Era Infrastructure (India) Ltd., (2022) 141 taxmann.com 289 (Delhi). Accordingly, Ld.CIT(A) deleted the disallowance made by the AO u/s.14A of the Act.

ACIT, CENTRAL CIRCLE-6(4), MUMBAI, MUMBAI vs. INDIABULLS REAL ESTATE LIMITED, DELHI