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TMI Blog2015 (6) TMI 1176X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of Rule 8D. In view it Rule 8D is not applicable to the assessment year under consideration and, therefore, set aside the orders of the lower authorities on this issue and remand the matter to the file of the Assessing Officer to decide the issue afresh Disallowance of rebate u/s 80IC on account of Exchange Rate Fluctuations - Held that:- The issue in hand is squarely covered in favour of the assessee and against the Revenue by the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Rachna Udyog [2010 (1) TMI 38 - BOMBAY HIGH COURT] has categorically held that the exchange rate fluctuation arises out of and is directly related to the sale transaction involving the export of goods of the industrial undertaking and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Commissioner of Income Tax (Appeals), Chandigarh dated 16.1.2012 relating to assessment year 2007-08. 2. Ground No.1 of the appeal is general in nature and hence, no comments are being given. 3. Ground No.2 of the appeal reads as under : 2. That the Learned C.I.T.(A) has erred in sustaining the disallowance of rebate u/s 80IC ₹ 5,50,866/- as per Rule 8D read with section 14A. 4. Briefly stated, the facts of the case are that the assessee had earned dividend income, which is exempt and had not shown any expenditure against the dividend income. The Assessing Officer disallowed total amount of ₹ 8,21,516/- under Rule 8D of the Income Tax Rules, 1962. Out of ₹ 8,21,516/-, the CIT (Appeals) deleted an amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Benches have set aside the matters back to the Assessing Officer where the additions were made on the basis of Rule 8D. In view of the judgment of the Hon'ble Bombay High Court in the case of Godrej Boyce Mfg. Co. Ltd. (supra), Rule 8D is not applicable to the assessment year under consideration and, therefore, I set aside the orders of the lower authorities on this issue and remand the matter to the file of the Assessing Officer to decide the issue afresh in accordance with law after affording due and reasonable opportunity of being heard to the assessee. 7. For statistical purposes, this ground of appeal is allowed. 8. Ground No.3 reads as under : 3 . That the Learned C.I.T.(A) has erred in sustaining the disallowance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of exchange between the date of export and the date of receipt of proceeds, since there is no variation in the sale price under the contract. The view which we have taken is also consistent with the view taken by a Division Bench of this Court on 15th Dec., 2009 in the case of Syntel Ltd. (IT Appeal Nos.1974, 1976 and 1978 of 2009). In the circumstances, we would affirm the judgment of the Tribunal insofar as the question of exchange rate fluctuation is concerned. 12. From the above, it is clear that the Hon'ble High Court has categorically held that the exchange rate fluctuation arises out of and is directly related to the sale transaction involving the export of goods of the industrial undertaking and, therefore, difference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t correct and the same should be worked out on pro-rata basis. I fully agree with the above submissions of the learned A.R. for the assessee and direct the Assessing Officer to re-work the disallowance on pro-rata basis. This ground of appeal is disposed off accordingly. 11. Ground No.5 of the appeal reads as under : 5. That the Learned C.I.T.(A) has erred in sustaining the disallowance of total interest expenses claimed during the year of ₹ 12,84,121/- u/s 14A and 36(1)(iii). 12. At the time of hearing of the appeal Ms. Meha Kansal, learned counsel for assessee did into press for this ground of appeal and accordingly, the same is dismissed as not pressed. 13. Ground No.6 of the appeal reads as under : 5. That th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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