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2015 (12) TMI 1288 - HC - Income TaxDisallowance u/s 14A - Held that - It is agreed between the parties that the issue raised herein stand concluded against the Revenue by the decision of this Court in the case Godrej & Boyce Mfg.Co.Ltd. VS. DCIT, (2010 (8) TMI 77 - BOMBAY HIGH COURT ) - Decided against revenue Claim of rebate under Section 88E - ITAT deleted the addition - Held that - Revenue does not dispute the fact that for the Assessment year 2006-07 the claim under Section 88E made by the respondent-assessee was on the similar basis as adopted in the subject Assessment Year and the claim was accepted by the Revenue. In view of the decision of the Tribunal in KBII Securities Pvt. Ltd. (2012 (7) TMI 930 - ITAT MUMBAI) which has been merely followed by the impugned order as well as the Revenue accepting an identical basis adopted in the earlier Assessment Year, coupled with the fact that even before us the Revenue is unable to point out to why and how the method of allocation of expenses made by the respondent-assessee is incorrect and/or bad.- Decided against revenue
Issues:
1. Disallowance under Rule 8D(2) read with Section 14A of the Income Tax Act, 1961. 2. Justification for relying on specific case law. 3. Claim of rebate under Section 88E of the Income Tax Act, 1961. Issue 1: Disallowance under Rule 8D(2) read with Section 14A: The appeal challenged the Tribunal's order deleting the disallowance made under Rule 8D(2) read with Section 14A of the Income Tax Act, 1961 for the Assessment Year 2007-08. The Court noted that the issue was conclusively decided against the Revenue in a previous case, "Godrej & Boyce Mfg. Co. Ltd. VS. DCIT." The Revenue's appeal for the earlier Assessment Year was also dismissed following the same precedent. Consequently, the Court held that the questions raised did not present any substantial question of law and were not entertained. Issue 2: Justification for relying on specific case law: The Tribunal justified its decision to rely on the case law of "Godrej & Boyce Mfg. Co. Ltd. VS. DCIT" despite the Revenue's non-acceptance of the principles laid down in that case. The Court observed that the Tribunal's reliance on the precedent was appropriate, especially considering the consistency in decisions across related cases. As a result, the questions regarding this issue were deemed not to raise any substantial question of law and were dismissed. Issue 3: Claim of rebate under Section 88E: Regarding the claim of rebate under Section 88E of the Income Tax Act, the respondent-assessee had initially claimed a rebate of Rs. 3.33 crores, which the Assessing Officer restricted to Rs. 3.37 crores. The Commissioner of Income Tax (Appeals) later allowed the respondent's appeal, directing the Assessing Officer to recompute the rebate by accepting the allocation of expenses done by the assessee. The Tribunal, in its impugned order, noted that the Revenue had accepted a similar claim for the earlier Assessment Year and also referred to a related case where the basis of rebate allocation was accepted. The Court found that the Revenue failed to demonstrate any fault in the method of expense allocation by the assessee. As a result, the Court concluded that the issue did not raise a substantial question of law and dismissed the appeal. In conclusion, the High Court of Bombay dismissed the appeal filed by the Revenue under Section 260A of the Income Tax Act, 1961, as the issues raised did not present substantial questions of law. The judgment emphasized the importance of consistent application of legal principles and upheld the decisions based on previous precedents and accepted practices in similar cases.
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