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2015 (12) TMI 1119 - ITAT KOLKATABogus long term capital gains in shares - whether long term capital gains could be treated as unexplained cash credit u/s 68 - Held that:- The action u/s 68 of the Act has been taken merely on the basis of the statement of the third party. We find that the assessees have duly proved the identity, creditworthiness and genuineness of the broker from whom the sale proceeds of shares were received by the assesses and hence the resultant long term capital gains thereon cannot be doubted with. Hence there is no scope for making any addition u/s 68 of the Act in the facts and circumstances of the case. Thus we have no hesitation in directing the Learned AO to delete the addition made u/s 68 - Decided in favour of assessee Disallowance u/s 14A read with Rule 8D - Held that:- We find that though the provisions of Section 14A of the Act which provides for disallowance of expenditure incurred by the assessee for the purpose of earning an income which do not form part of the total income is brought in the statute book by the Finance Act 2001 with retrospective effect from 1.4.1962, the computation of disallowance is provided in Rule 8D of the IT Rules. Rule 8D of the Rules came into effect from 24.3.2008. We find that the Hon’ble Bombay High Court in the case of Godrej & Boyce Manufacturing case reported in (2010 (8) TMI 77 - BOMBAY HIGH COURT ) had held that provisions of Rule 8D could be made applicable only from Asst Year 2008-09. The assessment year under appeal for all the assesses before us is Asst Year 2005-06 and hence the Learned AO erred in invoking Rule 8D of the Rules for making disallowance u/s 14A of the Act. - Decided in favour of assessee
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