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2016 (6) TMI 1428 - AT - Income TaxDisallowance u/s 14A r.w. Rule 8D - disallowance towards expenditure for earning exempt income - HELD THAT:- In view of the decision of Joint Investments Pvt. Ltd. [2015 (3) TMI 155 - DELHI HIGH COURT] we held that the Assessing Officer cannot make excessive disallowance under section 14A of the Act over and above the exempt income earned by the assessee and directed the Assessing Officer to restrict the disallowance to the extent of exempt income earned by the assessee. Thus, the ground raised by the Revenue is liable to be dismissed and dismissed accordingly. Application of second proviso to section 40(a)(ia) - Retrospective or prospective effect - Scope of legislative amendments - Diversified views - HELD THAT:- As per Ansal Landmark Township Pvt. Ltd. v. Addl. CIT [2014 (9) TMI 194 - ITAT DELHI] as subsequently confirmed by the Hon’ble Delhi High Court in [2015 (9) TMI 79 - DELHI HIGH COURT]second proviso to section 40(a)(ia) is declaratory and curative in nature and has retrospective effect from 1st April, 2005. During the course of hearing, the ld. DR has relied on the decision in the case of Prudential Logistics and Transports [2015 (2) TMI 847 - KERALA HIGH COURT] wherein the Hon’ble Kerala High Court has taken a view that the application of second proviso to section 40(a)(ia) of the Act is only prospective. Since there exists two contradictory decisions, we are of the considered opinion that the Hon’ble Supreme Court in the case of CIT v. Vegetable Products Ltd. [1973 (1) TMI 1 - SUPREME COURT] has held that the decision favourable to the assessee have to be acted upon. Thus, respectfully following the decision of the Agra Benches of the Tribunal in the case of Rajeev Kumar Agarwal [2014 (6) TMI 79 - ITAT AGRA] which was duly affirmed by the Delhi Benches of the Tribunal in the case of Ansal Landmark Township Pvt. Ltd. v. Addl.CIT(supra) and subsequently confirmed by the Hon’ble Delhi High Court, we find no infirmity in the order passed by the ld. CIT(A) on this issue and the ground raised by the Revenue is dismissed.
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