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2023 (10) TMI 1130 - ITAT HYDERABADDisallowance u/s 14A r.w.r. 8D - assessee is NBFC - whether addition could be made if the assessee had not earned any exempt income during the year under consideration? - HELD THAT:- There is no dispute that the assessee is a non-banking finance company, making investment in the group companies to meet their business requirements. In such a situation, it is beyond doubt that whenever the investee company declares dividend, such dividend would invariably be earned by the assessee and the assessee alone. It is not a case where only by chance the shares would be in the hands of the assessee when such a dividend is declared. If the assessee holds these shares as stock-in-trade, to be liquidated whenever the share price goes up in order to earn profits, then it would be possible that during such holding, the investee company may declare dividend. Purpose of assessee holding the shares is not to liquidate when the share price goes up and thereby to earn profit, but the assessee holds such shares in the group companies to meet the business requirements of such companies. Assessee is bound to receive the dividend when it is declared. Therefore, the decision of Maxopp Investment Ltd [2018 (3) TMI 805 - SUPREME COURT] as followed by Kingfisher Finvest India Ltd [2020 (10) TMI 518 - KARNATAKA HIGH COURT] is applicable to the facts of the case. Argument of the learned Counsel that the issue is held in favour of the assessee in assessee’s own case for earlier assessment years does not hold much water. A careful reading of order cited makes it clear that for the earlier assessment years, this fact of assessee investing in group companies for the business requirements was not brought to the notice of the Bench by either side. When once it has come to the notice of the Bench, it is not possible to perpetuate the mistake occurred on earlier occasion. It is the settled principle of law, as observed in the case of Distributors (Baroda) (P.) Ltd. vs. Union of India [1985 (7) TMI 1 - SUPREME COURT] that there is no heroism to perpetuate an error and to rectify such an error is a compulsion of the judicial conscious. Errors cannot be perpetuated on the name of consistency. We find it difficult to follow the view taken in the appeals for the assessment years 2016-17 & 2017-18 - Decided in favour of revenue.
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