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TMI Blog2019 (8) TMI 1860X X X X Extracts X X X X X X X X Extracts X X X X ..... oved by the Hon'ble Supreme Court. Therefore, the question as framed does not give rise to any substantial question of law. Thus, not entertained. Allowing the netting off the prior period income against the prior period expenditure without ascertaining the nexus between income and expenditure - HELD THAT:- Tribunal held that the Respondent was justified in computing the disallowance after setting off prior period income against the prior period expenses. In fact, the Tribunal noted the fact that for the Assessment Year 2007-08, the Revenue had accepted the net income offered after set off of prior period income with prior period expenses. This is in that year, where expenses of prior period were less than prior period income. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure without ascertaining the nexus between income and expenditure? 3 Re. Question (a): (i) The Respondent had made investment in a Company called M/s. Goa Shipyard Ltd., (GSL). The Respondent received dividend income from M/s. GSL. The Assessing Officer invoked Section 14A of the Act read with Rule 8D of the Rules and disallowed the expenditure claimed by the Respondent on earning dividend income. In appeal, the Commissioner of Income Tax (Appeals) allowed the Respondent s appeal and held that disallowance of 5% of the dividend income on the test of reasonable basis would be an appropriate disallowance under Section 14A of the Act; (ii) Being aggrieved, the Revenue carried the issue in appeal to the Tribunal. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od income with prior period expenses. This is in that year, where expenses of prior period were less than prior period income. (iii) We find that the view taken by the Tribunal on the facts cannot be found fault with. This, particularly, as the Revenue for a subsequent period accepted this practice of set off, which resulted in income and subjected it to tax. The basis/ principles for allowing the set off of prior period income with prior period expenses, has to be consistent for years. Therefore, the view taken by the Tribunal cannot be found faulted with. (iv) In view of the above, the question as framed does not give rise to any substantial question of law. Thus, not entertained. 5 Accordingly, Appeal dismissed. - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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