TMI Blog2022 (5) TMI 1327X X X X Extracts X X X X X X X X Extracts X X X X ..... pt under the Income-tax Act. We, therefore, direct the AO to delete the addition made on account of disallowance u/s 14A of the Act r.w.r.8D of the I.T.Rules. This ground is allowed in favour of the assessee. Disallowance on account of deduction claimed u/s 43B towards interest payment - payment is done by the assessee before the due date for filing the return of income u/s.139(1) - HELD THAT:- From the reading of the section it is clear that the assessee is entitled to claim deduction in the year in which the actual payment happens provided the said payment is done by the assessee before the due date for filing the return of income u/s.139(1) of the Act. We notice that the assessee has submitted the bank statements in support of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.10.2019 proposing the adjustment of Rs.96,57,60,845. The Assessing Officer (AO) passed a draft assessment order on 23.12.2019 incorporating the TP adjustment proposed by the TPO. In addition, the AO also made an addition of Rs.1,91,49,505 u/s 14A of the Act read with Rule 8D of the I.T.Rules, 1962 and made a disallowance of Rs.5,66,93,000 on account of deduction claimed u/s 43B of the Act. The assessee raised objections before the Dispute Resolution Panel (DRP). The DRP deleted the transfer pricing adjustment made by the TPO and sustained the additions made by the AO on the corporate tax issue. The AO passed the final assessment order giving effect to the directions of the DRP. 3. Aggrieved by the order of the AO, the assessee is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the disallowance u/s 14A of the Act. The AO passed the final order based on DRP directions. 5. Aggrieved, the assessee is in appeal before us. The learned AR reiterated the submissions made before the lower authorities and stated that the assessee has not earned any exempt income during the year. The learned AR also stated that it is now settled principle that when there is no exempt income, no disallowance u/s 14A is warranted based on the judgment of Hon ble Delhi High Court in the case of Cheminvest Limited v. CIT (2015) 378 ITR 33 (Delhi). 6. The learned Departmental Representative supported the orders of the lower authorities. 7. We heard rival submissions and perused the material on record. From the fact, as admitted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y income exempt under the Income-tax Act. We, therefore, direct the AO to delete the addition made on account of disallowance u/s 14A of the Act r.w.r.8D of the I.T.Rules. This ground is allowed in favour of the assessee. 8. The next issue is on the disallowance of deduction u/s 43B of the Act towards interest payment. The assessee had claimed a sum of Rs.5,66,93,000 as a deduction u/s 43B of the Act stating that the said amount was disallowed in the earlier year and now claimed as a deduction as the assessee has actually paid the amount of interest. The AO disallowed the expenditure based on the fact that the assessee has claimed that it is wrongly claimed and submitted a revised computation before the AO. However, the assessee raised a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an or borrowing from any public financial institution or a State financial corporation or a State industrial investment corporation, in accordance with the terms and conditions of the agreement governing such loan or borrowing, or ************** shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him : Provided that nothing contained in this section shall apply in relation to any sum which is actually paid by the assessee on or before the due date applicable in his case for f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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