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2010 (10) TMI 722 - AT - Income TaxDisallowance - Under s. 14A r/w r. 8D - the issue is no more res integra in view of the recent judgment dt. 12th Aug., 2010 by the Hon'ble Bombay High Court in Godrej and Boyce Mfg. Co. Ltd. vs. Dy. CIT (2010 (8) TMI 77 - BOMBAY HIGH COURT), wherein, it has been held that while r. 8D has no retrospective application, the provisions of s. 14A are applicable in such circumstances and the disallowance has to be worked out by the AO on some reasonable basis. Under such circumstance, we direct the AO to decide the quantum of disallowance as per the aforenoted judgment, after allowing a reasonable opportunity of being heard to the assessee. Set off of the brought forward business loss of earlier years of Rs. 39,85,596 against the profit realized on sale of business assets - Their Lordships held that as long as the profits and gains are in the nature of business profits and gains, and even if these profits are liable to be taxed under a head other than income from business and profession, the loss carried forward can be set off against such profits of the assessee. In this view of the matter, the objection raised by the authorities below, in our humble understanding, are devoid of any legal substance. Coming to the judicial precedents cited by the CIT(A), we find that in the case of CIT vs. Milling Trading Co. (P) Ltd. (1993 -TMI - 19720 - GUJARAT High Court), their Lordships were concerned with the question whether or not the assessee had option of not setting off the losses incurred against the income from different sources under the head "Business income". The issue was thus confined to the question as to how the total income for a particular assessment year is to be computed.
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