9911796707
TMI Blog2012 (11) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... in the international market at that point of time - assessee has demonstrated that such rate was in between 4% to 5%. It has charged the rate in between 6.5% to 7%. Thus, in such situation, even on this count also, no disallowance can be made - disallowance deleted Disallowance under sec. 14A - CIT(Appeals) has observed that Rule 8D will not be applicable in the present case in view of the decision of Hon'ble Bombay High Court in the case of Godrej Boyce (2010 (8) TMI 77 - BOMBAY HIGH COURT ) wherein it was held that Rule 8D has been brought on the statute book w.e.f. 24.3.2008 and it will be applicable from assessment year 2008-09 – Held that:- Disallowance has to be worked out after taking into consideration the surrounding circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venture partners have given temporary loan to the said company apart from the capital contribution. Assessing Officer was of the view that assessee has paid interest @ 9% per annum on the loan taken by it whereas it has charged interest @ 6.5% to 7% from M/s. PT Minda Asian Automotive Ltd., Indonesia. i.e. joint venture company. Assessing Officer further observed that by charging a lower rate of interest, assessee has extended benefit to the joint venture and, therefore, section 40A(2)(a)(b) of the Income-tax Act, 1961 is applicable. He worked out the difference on the alleged interest rate difference. The amount has been worked out at Rs.6,81,247. Assessing Officer in this way, made the addition of this amount in the total income of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign exchange fluctuation. This amount received by the assessee on fluctuation gain is Rs.16 lacs. 4. In his next fold submission, he pointed out that the amount was given by the assessee for business consideration. The assessee is a 50% shareholder of the joint venture , therefore, the amount was given on account of business exigencies and no disallowance can be made on the ground that lower rates of interest was charged. The assessee could give the amount even without charging any interest. He made reference to the decision of Hon'ble Supreme Court in the case of S.A. Builders reported in 288 ITR 1. On the other hand, Learned DR relied upon the order of the Learned CIT(Appeals). 5. We have duly considered the rival contentions an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer. 8. With the assistance of learned representatives, we have gone through the records carefully. It emerges out from the record that Assessing Officer made the disallowance for the purpose of sec. 14A with the aid of Rule 8D of the Income-tax Rules, 1962. Learned CIT(Appeals) has observed that Rule 8D will not be applicable in the present case in view of the decision of Hon'ble Bombay High Court in the case of Godrej Boyce reported in 328 ITR 81 wherein Hon ble High Court has held that Rule 8D has been brought on the statute book w.e.f. 24.3.2008 and it will be applicable from assessment year 2008-09. Learned CIT(Appeals) has accepted the contentions of the assessee and restrict the disallowance at Rs.1 lac, which acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
