TMI Blog2024 (4) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in the case of PCIT Vs. M/s Era Infrastructure (India) Pvt. Ltd. [ 2022 (7) TMI 1093 - DELHI HIGH COURT] held that the said amendment which was brought in by the Finance Act 2022 is for removal of doubts and, therefore, cannot presumed to be retrospective. Therefore, we restrict the disallowance u/s 14A read with Rule 8D(2)(iii) to Rs. 930/- which is the exempt income earned by the assessee during the year under consideration. This ground is partly allowed. Disallowance u/s 40(a)(ia) - non-deduction of TDS on interest paid by the assessee - contention of the assessee that the AO disallowed not only the interest but also processing fee and pre-closure charges treating them as interest for non deduction of TDS - HELD THAT:- Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Rules 1962. 3. That the learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in upholding a disallowance of a sum of Rs. 71,40,344/- representing interest paid by the assessee by invoking section 40(a)(ia) of the Act. 3.1 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that, provisions u/s 40(a)(ia) of the Act read with section 194A of the Act were inapplicable and as such, disallowance so made and sustained is not in accordance with law. 3.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that, in any case since the payee had paid the taxes on the interest paid by the appellant company, no disallowance was warranted in view of second provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable and the disallowance can be made, the expenditure for earning exempt income. 5. The Ld. Counsel for the assessee submits that the Hon ble Jurisdictional High Court in the case of DCIT Vs. M/s Era Infrastructure (India) Ltd. in ITA No.204/2022 dated 20.07.2022 held that an amendment to section 14A which was brought in for removal of doubts cannot be retrospective. Therefore, the Ld. Counsel submits that the amendment brought in by the Finance Act 2022 is not applicable for the AY 2013-14 which is under consideration. 6. Heard rival submissions, perused the orders of the authorities below. 7. In the case of Joint Investment Pvt. Ltd. Vs. CIT the Hon ble Jurisdictional High Court held that the disallowance u/s 14A read with Rule 8D cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their income and, therefore, in view of proviso to section 201(1) of the Act the assessee cannot be treated as deemed to be an assessee in default in respect of the interest paid for non deduction of tax at source and thus, no disallowance u/s 40(a)(ia) of the Act is warranted. Reliance was placed on the decision of the Hon ble Delhi High Court in the case of CIT vs. Ansal Landmark Township [377 ITR 635]. Reliance was also placed on the decision of Delhi High Court in the case of CIT vs. Dr. Jaideep Kumar Sharma in ITA No.95/2015 dated 19.11.2015. The Ld. Counsel further referring to pages 22 and 24 submits that Bajaj Finance Ltd. was issued certificate certifying that assessee had paid interest to them on the loans for the FY April 2012 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of CIT Vs. Ansal Landmark Township (supra) held as under: - 9. It is seen that the second proviso to Section 40(a)(ia) was inserted by the Finance Act 2012 with effect from 1st April 2013. The effect of the said proviso is to introduce a legal fiction where an Assessee fails to deduct tax in accordance with the provisions of Chapter XVII B. Where such Assessee is deemed not to be an assessee in default in terms of the first proviso to sub-Section (1) of Section 201 of the Act, then, in such event, it shall be deemed that the assessee has deducted and paid the tax on such sum on the date of furnishing of return of income by the resident payee referred to in the said proviso . .. 12. Relevant to the case in hand, what is common to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Agra Bench of the ITAT in the case of Rajiv Kumar Aggarwal v. CIT (order dated 29th May, 2013 in ITA No.337/Agra/2013) which in turn followed the decision of this Court in CIT v. Rajinder Kumar 362 ITR 241. It was held that the second proviso is declaratory and curative in nature. It was held that as long as the corresponding income was brought to tax in the hands of the payee, it was not intended to disallow the expenditure in the hands of the payer due to non deduction of tax at source. 5. The ITAT has in the impugned order in the present case noted that the Assessee has filed necessary confirmation from the payee that they have paid the amount received from the Assessee. The confirmation filed by the Assessee was enclosed in the paper ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
