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2024 (5) TMI 168 - MADHYA PRADESH HIGH COURTAddition u/s 14A - disallowance in cases where no exempt income has been claimed by the assessee during the year under consideration - ITAT deleted addition - as submitted ITAT ignoring the CBDT Circular No. 05 of 2014 dated 11.02.2014 and amendment to Section 14 of the Act inserted by the Finance Act, 2022 HELD THAT:- From the perusal of the order of the assessing authority, it appears that the assessing authority did not consider the documents submitted by the assessee during the course of the assessment proceeding and this fact came to light from the observation made by the appellate authority that despite availability of documents, additions were made by the assessing authority. Amendment brought in Section 14 (A) of the Act inserted by the Finance Act, 2022, inserting explanation which is clarificatory in nature hence have retrospective effect - It is clear that the contention of appellant in respect of question no.3 (a) is not relevant in this case as the assessment is for the year 2013-14, therefore, the amendment proposed in Section 14 (A) of the Act as discussed hereinabove would not be applicable in the present case and the submission of the appellant in respect of Section 14 (A) of the Act is not relevant in light of the amendment, therefore, the contention of the appellant to this effect that order of CIT appeal as well as an order of ITAT may be quashed is hereby rejected. The judgment rendered in the case of Chivenwest [2015 (9) TMI 238 - DELHI HIGH COURT] is worthy of reference, where it has been categorically held that Section 14 (A) of the Act will not apply, if no exempt income is received or receivable during the relevant previous year by the assessee and this finding is just and proper and further contention of the appellant in respect of the pendency of the case in the Apex Court i.e. PCIT vs. Adani Wilmart Ltd. [2021 (8) TMI 1390 - SC ORDER] against the order of the [2021 (1) TMI 1260 - GUJARAT HIGH COURT] and in the PCIT Vs. Karnataka State Financial Corporation [2021 (4) TMI 652 - KARNATAKA HIGH COURT] against the judgment of the Karnataka High Court are concerned, in the cases of the High Court, relief has been granted to the assessee by holding that no disallowance of the expenditure under Section 14 (A) of the Act can be made more than exact annual income earned by the assessee and it is the view of this Court that until and unless the issue travelled uptil Apex Court modifying or setting aside judgment of the High Court. Disallowance of operating expenses, cost of material consumed, employee benefits and other expenses debited in P&L account of the company - assessee failed to produce any details, documents and evidences to substantiate these expenses - ITAT upholding CIT(A) order of deleting addition - So far as other questions are concerned, since the same are based upon fact finding and we have already discussed the order of the CIT(A) and ITAT and find that the order of the CIT (A) is well reasoned order and disallowance made by the AO is contrary to the settled norms and in this case we approve the findings that according to the demand of the AO, assessee submitted all the relevant documents but before disallowing, no findings have been recorded by the AO and the order of the CIT (A) has been upheld by the ITAT and the addition made by the AO in the case of assessee for an amount has rightly been deleted. This Court is of the considered opinion that to maintain the parity in light of the view taken by the different High Courts, we are inclined to hold that deletion has rightly been made by the CIT (A) which was further affirmed by the ITAT and, therefore, no interference is warranted in the facts and circumstances of the case. Revenue appeal dismissed.
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