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TMI Blog2024 (10) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... e previous year relevant to an assessment year and the expenditure has been incurred during the said previous year in relation to such income not forming part of the total income. The Hon ble Court in Era Infrastructure India Ltd.[ 2022 (7) TMI 1093 - DELHI HIGH COURT] held the view that the amendment to Sec.14A, though it was for for removal of doubts , however, it cannot be presumed to be retrospective even where such language is used, if it alters or changes the law as it earlier stood. Another argument was that the cost of investment has wrongly been taken by Ld. AO. No fault could be found in the approach of CIT(A). Cost of investment , Ld. AO is directed to verify the same and adopt the correct cost of investments as per assessee s bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) erred in holding average value of only those investments will have to be taken from which the assessee derived exempted income during the year. 3. The ld. CIT (A) erred in observing that relied upon decision was not stayed / reversed, whereas in the relied upon case, the disallowance u/s 14A was invoked w.r.t. investments made in foreign companies only not Indian companies and for this reason the order was not challenged further. Hence the decision of the relied upon case is not applicable in instant case . 4. The Id. CIT (A) erred in not appreciating the note of the Explanation inserted to section 14A of the Act through Finance Act 2022 to clarify the true intention of the legislature w.r.t Sec.14A of the Act. 5. For these and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... responding TDS should also have been given credit in the hands of the Appellant. As is evident, the common issue in cross-appeal is disallowance u/s 14A. The assessee also seeks TDS credit of demerged entity. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. 2. Disallowance u/s 14A 2.1 The assessee being resident corporate assessee is stated to be wholly owned subsidiary of M/s Sundaram Finance Ltd. (SFL) The main object of the assessee is to undertake investments. The assessee earned exempt dividend income and also interest from tax free bonds for Rs. 30.93 Crores and offered disallowance of Rs. 18.64 Lacs on account of expenditure. The same was out of employee benefit expenses of Rs. 970. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Pvt. Ltd. (82 Taxmann.com 415) directed Ld. AO to compute disallowance by considering only those investments which have yielded exempt income during the year. The same has led to cross-appeals before us. 2.5 The Ld. AR has referred to the decision of Hon ble Delhi High Court in the case of Era Infrastructure India Ltd. (448 ITR 674) to submit that the amendment made by Finance Act, 2022 to Section 14A by inserting a non-obstante clause and Explanation will take effect only from 01-04- 2022 and cannot be presumed to have retrospective effect. The newly inserted explanation to Sec.14A provides that the provisions of this section shall apply and shall be deemed to have always applied in a case where the income, not forming part of the total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit of Rs. 16.35 Lacs was stated to be pertaining to income transferred to the assessee on account of demerger. Though the Ld. CIT(A) directed Ld. AO to allow credit of Rs. 52.08 Lacs after due verification, the remaining TDS credit was not considered owing to assessee s failure to submit relevant specific details by adducing the supporting evidences. Aggrieved, the assessee is in further appeal before us. 3.2 The Ld. AR has submitted that the assessee is in a position to substantiate the TDS credit of Rs. 16.35 Lacs also. Accepting the same, we direct Ld. AO to consider the same with a direction to the assessee to substantiate its claim. The corresponding ground stand allowed for statistical purposes. 4. The revenue s appeal stands dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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