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| The Tax Publishers2019 TaxPub(DT) 5419 (Mum-Trib) : (2019) 073 ITR (Trib) 0406 INCOME TAX ACT, 1961
Section 14A Rule 8D
Rule 8D could not be applied to the year under consideration, being the year prior to assessment year 2008-09. AO was thus directed to work out disallowance on a reasonable basis and not under rule 8D, i.e., 2% of the dividend income earned by assessee.
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Disallowance under section 14A - Expenditure against exempt income - Applicability of rule 8D -
Assessee received dividend income and claimed the same as exempt but did not make any disallowance under section 14A. AO invoked rule 8D and worked out disallowance.Held: Rule 8D could not be applied to the year under consideration, being the year prior to assessment year 2008-09. AO was thus directed to work out disallowance on a reasonable basis and not under rule 8D, i.e., 2% of the dividend income earned by assessee.
Followed:Godrej and Boyce Mfg. Co. Ltd. 92010) 328 ITR 81 (bom) : 2010 TaxPub(DT) 2182 (Bom-HC).
REFERRED :
FAVOUR : Partly in assessee's favour.
A.Y. : 2005-06
INCOME TAX ACT, 1961
Section 14A Section 115JB
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