TMI Blog2024 (2) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to meet the investment, then the presumption would arise that the investment is made out of funds so available with the assessee. Accordingly, we find no basis in the proportionate disallowance of interest expenditure made by the AO and upheld by the learned CIT(A). Disallowance on account of sales promotion expenses - HELD THAT:- As per the assessee, the entries pertaining to aforesaid expenditure were passed through a common ledger named Ramesh Chand (employee of the company responsible as a cost centre). It is further the plea of the assessee that the said entry was passed to the said account only for the sake of accounting convenience so that all the expenses related to sales promotion paid to agents/drivers/mechanics can be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 14A read with Rule 8D is not sustainable. We further find that vide amendment by the Finance Act, 2022, the non-obstante clause and explanation were inserted in section 14A of the Act to the effect that the section shall apply even if no exempt income has accrued or arisen or has been received during the year. We find that while dealing with the issue of whether the aforesaid amendment by the Finance Act, 2022 is prospective or retrospective in operation in PCIT vs M/s Era infrastructure (India) Ltd, [ 2022 (7) TMI 1093 - DELHI HIGH COURT] held that the amendment by Finance Act, 2022 in section 14A is prospective and will apply in relation to the assessment year 2022 23 and subsequent assessment years. Thus, even in view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss A/c under the head Sales Promotion Expenses without considering the submission made and documents provided. The appellant company prays that the said disallowance may please be deleted. 3. On the facts and in the circumstances of the case and in law, R the the Hon'ble National Faceless Appeal Centre (NFAC) erred in upholding the decision of Ld.AO of disallowance of Rs. 2,97,198/- on account of Section 14A r.w.r 8D. The appellant company prays that the said disallowance may please be deleted. 3. The brief facts of the case are that the assessee is engaged in the business of sale and service of Swaraj Mazda LCV vehicles. It also owns one fuel station, viz. IBP engaged in the sale of fuel and oil. For the year under consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed the names of the parties without giving any details of relation with them. Accordingly, the AO vide order passed under section 143(3) of the Act disallowed the proportionate interest expenditure of INR 21,48,282 in respect of the interest-free advances given to the related parties. The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee on this issue. 6. We have considered the submissions of both sides and perused the material available on record. From the perusal of the Balance Sheet of the assessee for the year ending 31/03/2013, forming part of the paper book from pages 1-18, we find that the assessee has share capital and reserves and surplus of INR 4,35,09,958, which is more than interest-free loan o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, upheld the disallowance made by the AO. Being aggrieved, the assessee is in appeal before us. 9. We have considered the submissions of both sides and perused the material available on record. As per the assessee, the entries pertaining to aforesaid expenditure were passed through a common ledger named Ramesh Chand (employee of the company responsible as a cost centre). It is further the plea of the assessee that the said entry was passed to the said account only for the sake of accounting convenience so that all the expenses related to sales promotion paid to agents/drivers/mechanics can be accumulated under one ledger. We find that a similar issue came up for consideration in the preceding assessment year before the coordinate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned order, we find that the assessee specifically submitted that during the year under consideration, no dividend income was earned by it out of the investments. The aforesaid fact has also not been disputed by the Revenue. We find that the Hon ble Delhi High Court in Cheminvest Ltd. v. CIT: [2015] 378 ITR 33 (Delhi) held that section 14A will not apply if no exempt income is received or receivable during the relevant previous year. We further find that the Hon ble jurisdictional High Court in Pr.CIT v/s Kohinoor Project (P) Ltd., [2020] 121 taxmann.com 177 (Bom.), rendered similar findings and dismissed the Revenue s appeal on a similar issue. Since, in the present case, the assessee has not earned any dividend income, therefore, respec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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