TMI Blog2022 (7) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... on 14A by the Finance Act, 2022 and decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the Revenue are accordingly allowed for statistical purposes. Addition u/s 2(22)(e) - inter corporate deposit (ICD) from its subsidiary company - CIT (A) has directed the Assessing Officer to delete the deemed dividend u/s 2(22)(e) - HELD THAT:- Although the submission of the assessee is that it is a typographical error, however, we find neither the assessee nor the Assessing Officer moved any rectification application u/s 154 of the I.T. Act before the learned CIT (A) for rectification of the typographic error. We deem it fit and proper to restore th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked the assessee to explain as to why the provisions of section 14A should not be applied. Rejecting the various explanations given by the assessee and applying the provisions of section 14A r.w.Rule 8D, the Assessing Officer disallowed the amount of Rs.1,66,03,554/- by computing as under: Amount (in Rs.) I Expenditure directly related to exempt income II Apportionment of expenditure not directly related to exempt income A Interest expenditure 5,12,46,738 B Average value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e no exempt income iss received or receivable during the relevant assessment year Respectfully following the Hon'ble ITAT decision in the above mentioned case, the addition made by the Assessing Officer deleted since there is no dividend income during this assessment year . 4. Aggrieved with such order of the learned CIT (A), the Revenue is in appeal before the Tribunal by raising the following grounds of appeal: 1. The CIT (A) erred in deleting the disallowance u/s 14A of Rs.1,66,03,554/- 2. The CIT(A) erred in ignoring CBDT's Circular No.5 of 2014 dated 11.02.2014, 3. The CIT(A) erred in ignoring the supreme Court decision in the case of CIT Vs Walfort share of stock Brokers P Ltd[326 ITR 11, wherein it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find the Assessing Officer in the instant case made addition of Rs.1,66,03,554/- by invoking the provisions of section 14A r.w. Rule 8D. We find the learned CIT (A) deleted the addition the reasons of which are already reproduced in the preceding paragraphs. We find the Finance Act 2022 has drastically amended the provisions of section 14A and a Coordinate Bench of the Tribunal has held the amendment to be retrospective in nature i.e. w.e.f. 1.4.1962. We, therefore, in the interest of justice deem it fit and proper to restore the issue to the file of the Assessing Officer with a direction to decide the issue afresh in the light of the amendments to the provisions of section 14A by the Finance Act, 2022 and decide the issue as per fact and l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions of the appellant. The appellant submitted that, the Assessing Officer has taken the reserves as positive by working out year end but it should be as per the date of advances, the reserves are negative. Further, this amount was taken as loan and the same was repaid within the year. Therefore, reliance is placed upon the CBDT Circular No. 19/2017, dated 12th June, 2017 which was stated as under: Section 2(22)clause (e) of the IT Act, 1961(the Act) provides that dividend includes any payment by a company, not being a company in which the public are substantially interested, of any sum by way of advance or loan to a shareholder, being a person who is the beneficial Owner of shares (not being shares entitled to a fixed rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned CIT (A) shows that he has mentioned that the deemed dividend will be applicable in the instant case. However, despite saying so, the learned CIT (A) has directed the Assessing Officer to delete the deemed dividend u/s 2(22)(e) of the Act. Although the submission of the learned Counsel for the assessee is that it is a typographical error, however, we find neither the assessee nor the Assessing Officer moved any rectification application u/s 154 of the I.T. Act before the learned CIT (A) for rectification of the typographic error. Considering the totality of the facts and in the interest of justice, we deem it fit and proper to restore the issue to the file of the Assessing Officer with a direction to decide the issue afresh in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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