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2013 (10) TMI 929 - AT - Income TaxDisallowance u/s 14A of the Income tax act - Disallowance of expenses relating to exempt dividend income – Held that:- Placing reliance in case of Godrej Boyce Manufacturing Co Ltd.[2010 (8) TMI 77 - BOMBAY HIGH COURT] have held that Rule 8D is applicable only from assessment year 2008-09 and in respect of prior years it has been held that disallowance of both indirect and indirect expenses has to be made on a reasonable basis after allowing opportunity of hearing to the assessee. The assessment year involved in the present appeal is assessment year 2007-08 and, therefore, Rule 8D is not applicable - Restored the matter to the file of AO for passing afresh order after necessary examination in the light of judgment of the Hon'ble High Court of Bombay in case of Godrej Boyce Manufacturing Co Ltd. Allowability of claim of funds raising expenses - Assessee during the year had incurred expenditure of Rs. 2,70,35,500/- for issue of fresh capital through Qualified Institutional Placement (QIP) route. The expenditure had been claimed as revenue expenditure – Held that:- Taking note of the judgment of the Hon’ble Supreme Court in the case of Punjab State Industrial Development Corporation[1996 (12) TMI 6 - SUPREME Court], it was held that expenditure incurred for expansion of capital base is capital in nature - Also rejected the alternate claim of the assessee for allowing the expenditure u/s 35D of the IT Act on the ground that there was no evidence for issue of capital in connection with extension of the existing business or for setting up of a new business – Matter restored to the file of AO for passing afresh order after detailed examination and after allowing opportunity of hearing to the assessee – Decided against the Assessee for statistical purpose.
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