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2014 (5) TMI 988 - AT - Income TaxDisallowance u/s 14A r.w. Rule 8D of the Act – Held that:- Following Godrej & Boyce Ltd. Mfg. Co. VS. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] - the provisions of section 14A are applicable in circumstances as are prevailing presently and the disallowance has to be worked out by the AO on some ‘reasonable basis’ and not under rule 8D in so far as the assessment years prior to 2008-09 are concerned – the preent case is related with the AY 2007-08 - rule 8D cannot be applied, but the disallowance is required to be worked out on some reasonable basis – thus, the matter is remitted back to the AO for computation of the disallowable amount as per rule 8D – Decided in favour of Assessee. Surcharge and education cess to be levied after giving MAT credit or before giving the credit – Held that:- The claim of the assessee is that MAT credit should first be reduced from the tax payable and thereafter on the residual amount the surcharge and educational cess be levied - there was merit in the contention of the assessee that MAT credit should first be reduced from the tax payable and thereafter on the residual amount the surcharge and educational cess be levied – What is required is that in the year when such credit is given, education cess and surcharge should be computed after giving credit of MAT to the tax computed on the assessed income in the same way as in the case of interest under sections 234B and 234C. The nature of MAT is like pre-paid taxes and, therefore, it should be treated alike for the purposes of computing education cess and surcharge also. - Decided in favour of Assessee.
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