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2014 (2) TMI 1032 - HC - Income TaxRetrospective effect of Section 14A and Rule 8D of the Act - Disallowance of Expenses - Whether the Tribunal was justified in holding that the provisions of sub-sections (2) and (3) inserted in Section 14A of the Income Tax Act, 1961 with effect from April 1, 2007 and rule 8D inserted in the Income Tax Rules, 1962 on March 24, 2008 were procedural and retrospective and were applicable for the assessment years 2001-02, 2004-05 and 2005-06 – Held that:- Assessee contended that Rule 8D cannot, by any stretch of imagination, be said to be retrospective in nature – Relying upon Godrej and Boyce Mfg. Co. Ltd. Vs. Deputy Commissioner of Income Tax and Anr. [2010 (8) TMI 77 - BOMBAY HIGH COURT] - The provisions of rule 8D of the Income Tax Rules which have been notified with effect from March 24, 2008, shall apply with effect from the assessment year 2008-09 – the Assessing Officer is duty bound to determine the expenditure which has been incurred in relation to income which does not form part of the total income under the Act - the department must be deemed to have accepted the position that Rule 8D is only prospective in nature - the department has to have some consistency in its views and it cannot blow hot and cold at its sweet-will – Decided in favour of Assessee.
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