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TMI Blog2012 (11) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... he law which could apply to an Assessment Year is the law prevailing on the 1st day of April. Since the Respected Lower Authority has added only a trifle amount of Rs.60,000/- by disallowance u/s.14A, therefore without disturbing the same we hereby dismiss this ground of the Revenue. - I.T.A. No.1123/Ahd/2011 WITH CO No.108/Ahd/2011 - - - Dated:- 19-1-2012 - SHRI MUKUL Kr.SHRAWAT AND SHRI A.K. GARODIA, JJ. Revenue by : Shri Vinod Tanwani, Sr.D.R. Assessee by : Shri S.N. Soparkar Sr.Adv. with Ms.Urvashi Shodhan ORDER PER SHRI MUKUL Kr. SHRAWAT, JUDICIAL MEMBER : This is an appeal at the behest of the Revenue which has emanated from the order of the Learned CIT(Appeals)-XI, Ahmedabad dated 11/02/2011 passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rative and other expenses the disallowance of Rs.10,88,777/- was restricted to Rs.60,000/- only. Revenue has preferred an appeal before Respected ITAT A Bench Ahmedabad and vide an order dated 30/05/2008 (ITA No.89/Ahd/2008 A.Y. 2002-03) upheld the order of the CIT(A) to the extent of deletion of Rs.81,90,944/-. However, as regards the disallowance of administrative and other expenses , the Respected Tribunal has set aside the issue to the file of the AO as per the following observation:- 12. Apropos ground no.2, the assessee earned single dividend of Rs.4,55,829/- as against which, the A.O, by an estimate, disallowed almost more than double the amount of Rs.10,88,777/- as administrative expenses. Similar controversy arose in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld.CIT(A), decision of Godrej Boyce Mfg. Co.Ltd. vs. Dy.CIT 234 CTR 01 (Bom.) cited. The assessee has also cited the provisions of Section 14A r.w. Rule 8D of IT Rules. The CIT(A) has reproduced an earlier observation of the CIT(A) made vide an order dated 16/10/2007 and in identical manner confirmed the allowance only to the extent of Rs.60,000/-, as is evident from paragraph No. 3.1; reproduced below:- 3.1. I have considered the submissions made by the A.R. of the appellant and the observations of the assessing office in the assessment order. In the case of Godrej Boyce Mfg. Co.Ltd. vs. DCIT (234 CTR 1)(Bom.), it was held that Sec. 14A(2) and (3) are applicable from A.Y. 2007-08 and that Rule 8D is applicable from A.Y. 2008-09. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench C ITAT Ahmedabad is referred pronounced in the case of CLP Power India Pvt.Ltd. vs. ITO - bearing ITA No.499/Ahd/2007 CO No.85/Ahd/2007 (A.Y.2003-04) order dated 31.10.2011, wherein vide paragraph Nos. 5.1 and 5.2, it was concluded as under:- 5.1. With this factual background, we have also considered few case laws cited before us. In the case of CIT vs. Dhanlakshmi Bank Ltd. 10 Taxman.com 213 (Ker.) a view has been expressed in respect of proportionate adjustment pertaining to administrative expenses that, quote So far as the disallowance of administrative expenditure is concerned, considering the facts of the case, that there is no precise formula for proportionate disallowance. No disallowance is called for proportionate adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d.CIT(A). This ground of the Revenue is dismissed. 6. In the present appeal as well undisputed fact is that only one dividend warrant of Rs.4,55,829/- was received by the assessee. Indeed it was highly improbable and beyond rational view that in order to earn a dividend of Rs.4,55,829/-, that too by a single dividend warrant, the assessee had incurred a huge administrative expense as assessed by the AO. Further we have carefully perused the decision of Godrej Boyce Mfg. Co.Ltd. vs. Dy.CIT (supra) and have noticed that the Hon ble Court has categorically pronounced that sub-section (2), (3) were inserted in section 14A by the Finance Act of 2006 with effect from 01/04/2007. The Hon ble Court has also said that Rule 8D was inserted by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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