9911796707
TMI Blog2010 (10) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... under rule 8D(2)(iii) out of dividend income of Rs. 34,28,843/- especially in view of the following:- a) Sub-clauses (2) and (3) to sec. 14A of the I.T. Act were inserted with effect from 01.04.2007 and, therefore, they are not applicable for this assessment year. b) Sec. 14A as it stood for AY 06-07, could be invoked for disallowance of actual expenditure only and not notional expenditure. c) Rule 8D was inserted w.e.f. 24.3.08 and, therefore, this rule can't be invoked for AY 06-07. d) Without prejudice to the above, disallowance could be made under rule 8D(2)(ii) only with reference to net interest expenditure of Rs. 2,63,104/- and not gross interest of Rs. 1,11,43,922/- ignoring the interest income of Rs. 1,08, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,297/-. Applying the rule 8D on the basis of Spl. Bench decision of ITAT in the case of Sh. Daga Capital Management P. Ltd. the AO has disallowed a sum of Rs.37,82,447/-. Ld.CIT(A) has given part relief to the assessee. Thus, the assessee is still aggrieved, hence raised ground no. 1 as stated above. 3. We have heard both the parties on this issue. Recently the decision of Hon'ble Bombay High Court has come in the case of Godrej and Boyce Manufacturing P. Ltd. 43 DTR 177 in which it has been held that rule 8D is not retrospective. Hence cannot be made applicable in AY 2006-07. Thus, to that extant the decision of Spl. Bench in the case of Daga Capital Management P. Ltd. (26 SOT (SB) 603) has been over ruled. The Tribunal now is taki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been confirmed by the Ld CIT(A) on the basis of provisions of section 14A of the Income Tax Act,1961 and Rule 8D of the IT Rules, 1962, since the assessee had dividend income also and therefore, it was held that the provisions of section 14A are applicable but as per the recent judgment of Hon'ble Bombay High Court rendered in the case of Godrej and Boyce Mfg. Pvt. Ltd. as reported in 43 DTR 177 (Bom.). Rule 8D is not retrospective and hence it cannot be made applicable in the assessment year 2006-07 as in the present case but still disallowance has to be made by the Assessing Officer on reasonable basis. We feel that this matter should go back to the file of the Assessing Officer for a fresh decision on this issue in the light of the judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w: - 4. "Ground no. 4 is against the finding of the ld. CIT(A) that 25% of the technical know-how fees paid by the assessee to SNIC and Co., Japan, was an expenditure of capital nature in view of the decision of Hon'ble Supreme Court in the case of Southern Switch Gears Ltd., 232 ITR 359. It was the common ground of both the parties that similar issue was restored to the file of the AO by "D" Bench of Delhi Tribunal in the case of the assessee for asstt. Years 1998-99 to 2000-01 in ITA Nos. 904 to 906/Del/07 dated 26.9.08, a copy of which was placed before us. Paragraph 7 of the order, dealing with the issue, is reproduced below for ready reference: - "7. It was also pointed out in the course of hearing that the agreement in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
