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2015 (12) TMI 1711 - AT - Income TaxBogus long term capital gains - 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 assessee's 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. - Decided in favour of assessee. Disallowance u/s 14A of the Act read with Rule 8D - addition on the basis of the statement of the third party - Held that:- 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 (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. In the absence of these factual findings, AO cannot straight away resort to make disallowance u/s 14A of the Act and hence the addition made on this account for all the assesses are deleted. Accordingly, the grounds raised by all the assesses in this regard are allowed.
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