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2011 (1) TMI 1441 - AT - Income TaxAppeal for revenue for Assessment - Nature of receipts Capital or Revenue - the AO treated the amount received by the assessee as west Bengal Industrial Promotion Assistance(WBIPA) as 'revenue receipt' and on appeal, the Ld. CIT(A) treated the WBIPA as a capital receipt and directed the AO to delete the additions for all the years under appeal. Aggrieved by the said order, now the revenue is in appeals before us. HELD THAT:- the sole purpose behind the grant of assistance is to tide over the financial crisis and promotion of industries and that both these activities are related to capital field and cannot be linked up with day to day operations of the appellant in any manner. Respectfully following the jurisdictional Kolkata ITAT and High Court decisions, I treat WBIPA as a capital receipt and direct the A.O to delete the addition. This ground of appeal of the revenue for all the three assessment years are dismissed. Rule 8D(2)(iii) for disallowance - HELD THAT:- Since Rule 8D was inserted by the IT 5th Amendment Rules 2008 w.e.f. 24.3.2008 and Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] has held that it is not retrospective in nature this rule is not applicable for the year under appeal. Therefore, the Ld. CIT(A) was not justified in directing the AO to apply Rule 8D(2)(iii) for disallowance. In the result, the appeals of the revenue for Assessment Years 2000-01 and 2006- 07 are dismissed and the appeal for Assessment Year 2005-06 of the revenue is partly allowed.
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