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2014 (9) TMI 259 - AT - Income TaxExpenses u/s 14A disallowed – Tax free income - Held that:- Assessee has earned tax free income during the year and the AO has worked out disallowance u/s 14A following the method prescribed under Rule 8D of the Rules – relying upon GODREJ AND BOYCE MFG. CO. LTD. Versus DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER [2010 (8) TMI 77 - BOMBAY HIGH COURT] - Rule 8D is applicable from AY 08-09 - prior to assessment 08-09, the A.O has to work out the disallowance on a reasonable basis - some of the investments have been acquired in earlier years – thus, the matter is remitted back to the AO for verification and also about the availability of the tax free funds in the year of investments – Decided in favour of assessee. Depreciation on vehicles given on lease – Held that:- As decided in assessee’s own case for the earlier assessment year, it has been held that sale and lease back is a continuing transaction addition admitted by both the sides – decided in favour of assessee. Reversal of provision for diminution in the value of investment – Held that:- Before AO, the Assessee’s submission was that the provisions for diminution in the value of investment was not claimed as deduction in earlier years and therefore its reversal need not be taxed in the year under review – the chart was not before AO and CIT(A) - the factual aspect of the chart needs verification – thus, the matter is remitted back to the AO – Decided in favour of revenue.
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