Sansera Engineering (P.) Ltd. v. CIT

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The Tax Publishers2012 TaxPub(DT) 2225 (Bang-Trib) : (2012) 046 (II) ITCL 0439 : (2012) 136 ITD 0238 INCOME TAX ACT, 1961 --Disallowance under section 14A--Expenditure against exempt income Applicability of rule 8D--CIT in exercise of power under section 263 passed a revisional order on ground that AO ought to have applied the provisions of section 14A read with rule 8D as assessee had income from dividends, which was an exempted income under section 10. Assesee submitted that though section 14A was introduced on the statute by the Finance Act, 2001, rule 8D had been introduced with effect from 24-3-2008. Thus, the rule was effective from assessment year 2008-09 and would not apply to assessment year 2007-08. Held: As per the ratio laid down by the Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. v. Dy. CIT 2010 TaxPub(DT) 2182 (Bom-HC) : (2010) 194 Taxman 203 (Bom) the provisions of rule 8D were applicable prospectively and not retrospectively. Thus, AO was directed to compute disallowance, if any, by applying a reasonable method having regard to the facts of the case. Income Tax Act, 1961, Section 14A Income Tax Act, 1961, Section 263 IN THE ITAT BANGALORE 'A' BENCH N.K. SAINI, A.M. & SMT. P. MADHAVI DEVI, J.M. Sansera Engineering (P.) Ltd. v. CIT IT Appeal No. 441 (Bang.) of 2011 A.Y. 2007-08 Appellant by : Devaraj, Respondent by : Pratap Singh, ORDER *N.K. Saini, Accountant Member* This appeal filed by the assessee is against the order dated 16-3-2011 of the Commissioner, LTU, Bangalore. 2. In this appeal, the assessee has raised the following grounds: '1. The order of the Commissioner is bad in law. 2. The Commissioner erred in coming to the conclusion that the judgment favouring the appellants stand was not applicable. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2012 TaxPub(DT) 2225 (Bang-Trib) : (2012) 046 (II) ITCL 0439 : (2012) 136 ITD 0238

INCOME TAX ACT, 1961

--Disallowance under section 14A--Expenditure against exempt income Applicability of rule 8D--CIT in exercise of power under section 263 passed a revisional order on ground that AO ought to have applied the provisions of section 14A read with rule 8D as assessee had income from dividends, which was an exempted income under section 10. Assesee submitted that though section 14A was introduced on the statute by the Finance Act, 2001, rule 8D had been introduced with effect from 24-3-2008. Thus, the rule was effective from assessment year 2008-09 and would not apply to assessment year 2007-08. Held: As per the ratio laid down by the Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. v. Dy. CIT 2010 TaxPub(DT) 2182 (Bom-HC) : (2010) 194 Taxman 203 (Bom) the provisions of rule 8D were applicable prospectively and not retrospectively. Thus, AO was directed to compute disallowance, if any, by applying a reasonable method having regard to the facts of the case.

Income Tax Act, 1961, Section 14A

Income Tax Act, 1961, Section 263

IN THE ITAT BANGALORE 'A' BENCH

N.K. SAINI, A.M. & SMT. P. MADHAVI DEVI, J.M.

Sansera Engineering (P.) Ltd. v. CIT

IT Appeal No. 441 (Bang.) of 2011

A.Y. 2007-08

Appellant by : Devaraj,

Respondent by : Pratap Singh,

ORDER

N.K. Saini, Accountant Member

This appeal filed by the assessee is against the order dated 16-3-2011 of the Commissioner, LTU, Bangalore.

2. In this appeal, the assessee has raised the following grounds:

'1. The order of the Commissioner is bad in law.

2. The Commissioner erred in coming to the conclusion that the judgment favouring the appellants stand was not applicable.