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TMI Blog2022 (9) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... elayed by 55 days in filing the appeal before the Tribunal due to outbreak of COVID-19 pandemic and accordingly, the delay in filing the appeals are condoned and admitted the appeals for adjudication. 3. The only effective ground raised in both the appeals relates to deletion of addition towards disallowance made under section 14A of the Income Tax Act, 1961 ["Act" in short] read with Rule 8D of Income Tax Rules, 1962 as well as importing the provisions of section 14A for the purpose of computation of book profit under section 115JB of the Act. 4. In the assessment order for the assessment year 2014-15, the Assessing Officer has observed that the assessee has earned Rs..1,34,112/- as dividend from domestic companies and claimed the same a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to the extent of Rs..237.34 crores, which was payable on working capital loans (Rs..178.20 crores), term loans (Rs..59.14 crores). Before the Assessing Officer, the assessee has submitted that these loans are specifically taken for purchase of fixed assets and execution of projects. Loans availed are mainly project specific loans and these loan funds were utilized for the purpose of business and hence interest payments made were accounted as expenditure. After considering the submissions of the assessee, the Assessing Officer made disallowance under section 14A r.w. Rule 8D of Rs..12,09,15,421/- against the dividend income of Rs..2,03,674/-. 5. The assessee carried the matter in appeal before the ld. CIT(A). After considering the submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the assessment year 2014-15 and Rs..237.34 crores for the assessment year 2016-17, which are payable on the working capital loans and term loans, which are specifically taken for purchase of fixed assets and execution of projects. As loans available are mainly project specific loans and these loan funds were utilized for the purpose of business only and the interest payments are relatable to the business of the assessee company and allowable under section 36 of the Act. Accordingly, the assessee has contended before the ld. CIT(A) that the disallowance under section 14A of the Act cannot exceed the exempt income and relied on the decision of the Tribunal in assessee's own case for the assessment year 2010-11 vide order dated 07.12.2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Tribunal in the assessee's own case, the AO is directed to restrict the disallowance u/s. 14A to the extent of exempt income earned. 'The appellant's grounds connected to the disallowance u/s. 14A are partly allowed. 7.4 By considering the decision of the Coordinate Benches of the Tribunal including various judgements of various Courts, the ld. CIT(A) has rightly directed the Assessing Officer to restrict the disallowance under section 14A of the Act to the extent of exempt income earned. We find no reason to interfere with the order passed by the ld. CIT(A) on this issue and accordingly, the ground raised by the Revenue is dismissed for both the assessment years. 8. So far as disallowance under section 14A of the Act made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the amendment made by the Finance Act, 2022 to section 14A of the Act by inserting a non obstante clause and an explanation after the proviso, a change in law has been brought about and consequently, it was prayed for reversing the order passed by the ld. CIT(A). 8.1 On the other hand, by filing the copy of judgement of Hon'ble High Court of Delhi in the case of PCIT v. Era Infrastructure (India) Ltd. [2022] 141 taxmann.com 289 (Delhi), the ld. Counsel for the assessee prayed for following the same. 8.2 By considering various judgements, the Hon'ble Delhi High Court has observed and held as under: "8. Consequently, this Court is of the view that the amendment of Section 14A, which is "for removal of doubts" cannot be presumed to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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