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2023 (8) TMI 872 - AT - Income TaxDisallowance u/s 14A - Scope of amendment brought out in the Finance Act, 2022 to the provisions under section 14A - HELD THAT:- On perusal of the Memorandum of the Finance Bill, 2022 reveals that it explicitly stipulates that the amendment made to section 14A will take effect from 1st April, 2022 and will apply in relation to the assessment year 2022-23 and subsequent assessment years. Similar issue was subject matter in appeal before the Tribunal and in the case of Maxivision Eye Hospital Pvt. Ltd. [2022 (7) TMI 1450 - ITAT CHENNAI] The explanation inserted in the provisions of section 14A by the Finance Act, 2022 is prospective and not retrospective and since the assessee has not earned any exempt income, the addition made towards disallowance u/s 14A of the Act is deleted in view of the decision in the case of CIT v. Chettinad Logistics (P) Ltd. [2017 (4) TMI 298 - MADRAS HIGH COURT] as well as the decision of Chettinad Logistics (P) Ltd. [2018 (7) TMI 567 - SC ORDER]. This ground of appeal is allowed. Nature of expenses - ROC fees - revenue or capital expenditure - HELD THAT:- Due to increase in share capital, the assessee has incurred expenses on account of ROC fees and the AO has treated the same as capital in nature and disallowed the claim of the assessee, which was confirmed by the ld. CIT(A). When the AO has treated the expenses as capital in nature, depreciation should have been allowed, which was not done in this case. Accordingly, we set aside the order of the ld. CIT(A) on this issue and remit the matter back to the file of the AO to examine and decide the issue afresh in accordance with law by affording an opportunity of being heard to the assessee. Disallowance of difference in TDS deductions - assessee has explained that the difference “may be TDS difference” has not been accepted and accordingly the difference amount was disallowed and added to the income of the assessee - HELD THAT:- As before CIT(A) confirmed the addition by observing that since the assessee could not admit total receipts, thereby resulting in short reflection of gross receipts in the books of accounts for taxation. Before the Bench, assessee could not offer any convincing explanation towards short reflection of gross receipts. Accordingly, the ground raised by the assessee is dismissed.
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