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2023 (6) TMI 575 - ITAT HYDERABADDisallowance u/s 14A - Scope of amendment of section 14A - retrospectivity - assessee incurred interest expenditure in respect of the amounts that were used for making investment also - CIT(A) relied upon the amendment to section 14A of the Act by insertion of explanation by Finance Act, 2022 - HELD THAT:- In the case of Era Infrastructure (India) Ltd [2022 (7) TMI 1093 - DELHI HIGH COURT] considered the effect of amendment made by the Finance Act, 2022 to section 14A of the Act by insertion of a non obstante clause and explanation after the proviso, subsequent to the decision of the Hon'ble Delhi High Court in the case of PCIT vs. IL&FS Energy Development Co. Ltd. [2017 (8) TMI 732 - DELHI HIGH COURT] analysed the same in the light of the decision in the case of Sedco Forex International Drill. Inc. vs. CIT [2005 (11) TMI 25 - SUPREME COURT] reiterated in M.M. Aqua Technologies Ltd. [2021 (8) TMI 520 - SUPREME COURT] and held that the amendment of section 14A of the Act which is ‘for removal of doubt’ cannot be presumed to be retrospective even where such language is used, if it alters or changes law as it earlier stood. Thereupon the Hon'ble High Court followed the decision of IL&FS Energy Development Co. Ltd., (supra) and concluded that no disallowance u/s 14A of the Act can be made if the assessee had not earned any exempt income during the year under consideration. Hon'ble High Court, however, was pleased to clarify that the orders passed in the case of Era Infrastructure (India) Ltd [2022 (7) TMI 1093 - DELHI HIGH COURT] shall abide by the final decision of the Hon'ble Supreme Court in the SLP filed in the case of IL&FS Energy Development Co. Ltd., (supra). We are not in agreement with the submissions made on behalf of the Revenue that since the Tribunal at Hyderabad is not bound by the decisions of the other Hon'ble High Courts, the findings of the learned CIT(A) following the provisions of law has to be upheld. As pertinent to note that learned CIT(A) himself followed the decision in the case of Williamson Financial Services Limited [2022 (7) TMI 451 - ITAT GAUHATI] In the absence of any decision of the Hon'ble jurisdictional High Court/Hon'ble Supreme Court, the decisions of other Hon'ble High Courts will constitute the binding precedent to be followed by the Tribunal. Decided in favour of assessee - orders now passed in this appeal shall abide by the final decision of the Supreme Court in the SLP filed in the case of IL&FS Energy Development Co. Ltd., (supra).
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