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TMI Blog2014 (4) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... d Commissioner (Appeals)-II, Mumbai. 2. The sole common ground raised by the assessee in all the years under appeal is, whether or not the learned Commissioner (Appeals) was justified in confirming the disallowance under section 14A of Rs. 95,609 for the assessment year 2002-03, Rs. 7,66,639 for the assessment year 2004-05, Rs. 8,57,174 for the assessment year 2005-06 and Rs. 10,09,769 for the assessment year 2007-08 made by the Assessing Officer after invoking the provisions of rule 8D. 3. Since all these appeals pertain to the same assessee involving common issues arising out of identical set of facts and circumstances, therefore, as a matter of convenience, these appeals were heard together and are being disposed of by way of this cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties only. Having regard to these particulars facts we are satisfied that the facts of the case of the assessee are distinguishable from those in various judgments relied upon by the learned Counsel for the assessee. However, we are not satisfied that for these reasons alone the expenditure was required to be arithmetically allocated on proportionate basis. It is true that the expenditure claimed by the assessee is required to be allocated between these two sources of income and other minor receipts but th eao is required to analyse the facts so as to arrive at the quantum of expenditure that can be apportioned amongst various receipts. Expenditure incurred by the assessee may or may not be in the same proportion as the receipts earned fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even though it has been made under the formula of rule 8D. Accordingly, he confirmed the said disallowance. 6. Before us, the learned Counsel for the assessee submitted that, first of all, the provisions of rule 8D has been applied which cannot be held to be applicable because the assessment years involved is prior to the assessment year 2008-09. He also submitted before us, analysis of the administrative expenditure to show, that what could be the expenditure which can be said to be attributable for the earning of exempt income and also the expenditures which are solely and exclusively incurred for the purpose of the assessee's other business. His other main limb of the argument is that, if 0.5% is taken on the average investment, for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner (Appeals). Such a working of the disallowance cannot be sustained for the reason that, firstly, it is beyond the mandate of the directions given by the Tribunal; and secondly, the provisions of rule 8D are not applicable, in the assessment years prior to the assessment year 2008-09, in view of the decision of the Hon'ble Jurisdictional High Court in Godrej & Boyce Mfg. Co. Ltd. (supra). The learned Counsel for the assessee, before us, had submitted that even if 0.5% of the average investment is taken into consideration for making proportionate disallowance, then also the working of the Assessing Officer is faulty, because there are huge investments which are not capable of yielding any exempt income i.e., any income genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not pertain to any investment which has yielded or is capable of yielding any exempt income, then such interest expenditure cannot be allocated or can be considered for making any disallowance; thirdly, if general administrative expenditure cannot be properly allocated or attributable for the purpose of exempt income, then while arriving at the 0.5% average investment, the Assessing Officer shall remove those investments which are not capable of earning exempt income. The assessee will provide all the necessary details to the Assessing Officer for the purpose of adjudicating of this issue. Thus, the issue of section 14A shall be decided accordingly, sans the application of the provisions of rule 8D. Consequently, we set aside the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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