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2023 (11) TMI 933 - ITAT AHMEDABADRevision u/s 263 - Non making disallowance u/s 14A when assessee has made huge investment in shares and securities which can generate exempted income u/s 10(34) - As per CIT assessee has not made any disallowance under the provision of section 14A r.w.Rule 8D of Income-tax Rules which was compulsory to have been made in pursuance to the CBDT Circular No. 05/2014 dated 11/02/2014, even in a situation when the assessee has not earned any exempted income - HELD THAT:- In revising the Assessment Order u/s 263 of the Act, the twin conditions need to be satisfied being erroneous in so far prejudicial to the interest of revenue. If any of the condition is missing, then the assessment cannot be revised u/s 263 of the Act. Admittedly, in the given case, there is no exempted income u/s 10(34) of the Act for the year under consideration. The Hon’ble Courts time and again held that there cannot be any disallowance under the provision of section 14A r.w.Rule 8D of Income tax Rules in a situation where there is no exempt income earned by the assessee. Now it has become law of the land by virtue of the findings of the Hon’ble SC that there cannot be any disallowance u/s 14A r.w. Rule 8D of Income-tax Rules in a situation where the assessee has not earned any exempted income until and unless there is some change under the provisions of law. The fact that the assessee has not earned exempt income has nowhere been disputed by the Ld. DR appearing on behalf of the revenue. Accordingly, we hold that there is no error causing any prejudice to the interest of revenue in the assessment framed u/s 143(3) of the Act. Scope of amendment under the provision of section 14A by way insertion of an explanation clarifying that the disallowance needs to be made u/s 14A even there is no exempt income earned by the assessee - We find that such amendment is not applicable for the year under consideration by virtue of the order of the ITAT in the case of DCIT Vs. M/s CLP India Pvt. Ltd [2022 (11) TMI 422 - ITAT AHMEDABAD] - Appeal of assessee allowed.
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