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Judgment
Per Satbeer Singh Godara, Judicial Member:
This Revenue’s appeal for Assessment Year 2017-18, arise s against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2024-25/1065534126(1) dated 11.06.2024, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
This Revenue’s appeal raises the following substantive grounds:
“(i)Whether in facts and circumstances of the case, the ld. CIT(A) has erred in allowing the appeal of the assessee on the fact that the assessee co uld not establish the creditwor thiness of the credito rs and genuineness of transactio n in respect of cre dit of Rs.1,89,00,000/- on account of lo an/advance s received back by the assessee in its financial statement as required unde r section 68 of the Inco me Tax Ac t, 1961?
(ii)Whether in facts and circumstances of the case, the ld. CIT(A) has err ed in fact in dire cting in dele ting the disallo wance o f Rs.13,87,500/- may by the AO u/s 14A without appreciating the facts that the CBDT clarify that the Rule 8D r .w.s . 14A provides that the disallo wance of the expenditure has to be made e ven if taxpaye r has earne d any exempt income.”
Coming to the Revenue’s former substantive ground seeking to revive section 68 addition of Rs.1,89,00,000/- made in the assessment order dated 24.12.20219; a perusal o f the case records indicates that the learned Assessing Officer had primarily relie d on his findings in assessment ye ar 2015-16 on the very issue (page 7 para 4) whilst holding the loans/advances in que stion as unexplained cash credits u/s 68 of the Act.
That being the case, learne d counsel represe nting assessee takes us to page 3 in the paper book wherein this tribunal has already accepted it’s case in IT A No. 267/Del/2019 (A.Y. 2015-16) decided on 04.10.2019. We are further informed that the corresponding creditor s also happen to be almost the same in both these assessment years. All these clinching intervening deve lopments have go ne un-re butted from the Revenue side. We thus see no reason to accept the Revenue’s instant first and foremost substantive ground which stands rejected in very terms.
So far as the Revenue’s latter substantive ground on the issue of se ction 14A r.w . Rule 8D disallowance of Rs.13 ,87,500/- is concerned, there is hardly any dispute between the parties that the assessee had no t derived any exempt income in the relevant previous year. T hat being the case, we quote Cheminvest Limited vs. C IT (2015 ) 61 taxmann.com 118 (De lhi) that the impugned disallowance does not apply in absence o f any such exempt income. This is indeed coupled with the fact that the legislature has recently amended section 14A by inserting explanation thereto vide Finance Act, 2022 w.e.f. 01.04.2022 that such a disallowance could indeed by made even in abse nce of exempt income. We reiterate that we are in A.Y . 2017-18 and the foregoing amendment doe s not carry any retrospective effect as per PCIT Vs. Era Infrastructure India Ltd. (2024) 448 ITR 674 (Del.). Re jected accordingly.
No other ground or argument has been pressed before us.
This Revenue’s appeal is dismissed.