NEW INDIA RETAILING & INVESTMENT LTD.,KOLKATA vs. D.C.I.T., CIRCLE - 5(1), KOLKATA, KOLKATA

ITA 1285/KOL/2024Status: DisposedITAT Kolkata11 September 2024AY 2018-2019Bench: SRI SONJOY SARMA, JUDICIAL MEMBER & SRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.A. No.: 1285/KOL/2024 Assessment Year: 2018-19 New India Retailing & Investment Ltd.....................................Appellant [PAN: AAACN 9970 F] Vs. DCIT, Circle-5(1), Kolkata.....................................................Respondent Appearances: Assessee represented by: Kinjal Buaria, CA and Aritra Nag, Adv. Department represented by: A.K. Dutta, Addl. CIT. Date of concluding the hearing : September 3rd8 pages
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What did the Tribunal hold?

The Tribunal held that disallowance under Section 14A read with Rule 8D cannot be made if no exempt income is earned from investments. It also noted that the amendment to Section 14A by the Finance Act, 2022, is not retrospective.

What were the facts?

The Assessing Officer (AO) disallowed expenses under Section 14A of the Income Tax Act, 1961, on investments from which dividend income was received, but not on investments that did not yield dividend. The CIT(A) confirmed this disallowance, relying on a CBDT circular and interpreting an amendment to Section 14A as retrospective.

What were the issues?

Whether disallowance under Section 14A is permissible when no exempt income is earned, and whether the amendment to Section 14A is retrospective.

Which sections of the Income-tax Act were involved?

Section 14A

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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA

Before: SRI SONJOY SARMA & SRI SANJAY AWASTHI

For Appellant: CA and Aritra Nag, Adv

Per Sanjay Awasthi, Accountant Member:

In this case the appellant filed its return of income on 28.09.2018 declaring total loss of Rs. 1,60,666/-. This return was picked up for scrutiny and there the Assessing Officer (hereinafter referred to as ld. 'AO') found that the appellant had earned total dividend income of Rs. 2,85,14,679/- which did not form part of total income. The ld. AO also noticed that the assessee had on its own disallow

The order continues below.

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