TMI Blog2012 (8) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... from mutual fund u/s 10(33) - Held that:- For failure to file the details of expenditure incurred by the assessee for earning the said income, AO made disallowance of Rs.6.55 lakhs reveals that it lacks reasoning and the basis for coming to the quantification of disallowance at Rs.6.55 lakhs - as it is not evident as to how this figure of Rs.6.55 lakhs has been arrived at the order of CIT(A) is set aside and restore the matter to the file of AO with a direction to recompute the disallowance warranted in terms of S.14A keeping in mind the provisions of Rule 8D as laid down in GODREJ AND BOYCE MFG. CO. LTD. [2010 (8) TMI 77 - BOMBAY HIGH COURT] - assessee’s appeal is partly allowed for statistical purposes. - ITA No.800/Hyd/2011 & ITA No.86 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessment year 2005-06. The Tribunal vide its order dated 4.10.2011, decided this issue in favour of the assessee with the following observations- 5. .As for the second issue of disallowance of bad debts, we find that the CIT(A) has discussed the relevant decisions on the issue and has rightly concluded that there was no dispute that the transactions of debts/ICDs had actually taken place and interest thereon had been offered to tax over the years and assessed as business income in the hands of the assessee, and as such, write off of such debts after initiation of legal proceedings could not be considered as lacking bona fides. There being no mistake in the order of the CIT(A) in the facts of the case on this issue and the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it for earning the said income, assessee failed to furnish the same. The assessing officer therefore, made an ad-hoc disallowance of Rs.6,55,000/- invoking the provisions of S.14A of the Act. On appeal, the CIT(A) following the decision of the Bombay High Court in the case of Godrej and Boyce Mfg. Ltd. (328 ITR 81) upheld the said disallowance made by the assessing officer. Hence, assessee is in second appeal before us on this issue. 9. During the proceedings before us, the learned counsel for the assessee submitted that there is no expenditure incurred by the assessee for earning of the exempt income, and therefore, the disallowance of Rs.6.55 lakhs made by the assessing officer is unjustified and unwarranted. He placed reliance on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve also perused the judgment of the Bombay High Court in the case of Godrej and Boyce Mfg. Co. Ltd. V/s. CIT (328 ITR 81), which approved the disallowance in principle, by holding that that the provisions of Rule 8D should be made applicable even to the assessment years prior to the amendment to the said rule. It has been held by the Hon ble Bombay High Court in that case, inter alia, as follows- 67. Even in the absence of sub-ss. (2)and (3)of s.14A and of r.8D, the AO was not precluded from making apportionment. Such an apportionment would have to be made in order to give effect to the substantive provisions of sub-s.(1) of s.14A which provide that no deduction would be allowed in respect of expenditure incurred in relation to income wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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