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2019 (8) TMI 1860 - HC - Income TaxDisallowance u/s.14A on a reasonable basis - HELD THAT:- Tribunal noted the fact that Rule 8D of the Rules would not be applicable prior to the Assessment Year 200809, as held by this Court in Godrej & Boyce Manufacturing Company Ltd. [2010 (8) TMI 77 - BOMBAY HIGH COURT] In the above view, the Tribunal upheld the reasonable basis for disallowance of expenditure to earn exempted income at 5% of the investment as held by the Commissioner of Income Tax (Appeals). Thus, dismissed the Revenue’s appeal for the Assessment Year 2004-05. We note that the decision of the Tribunal is in accord with the view of this Court, as approved by the Hon'ble Supreme Court. Therefore, the question as framed does not give rise to any substantial question of law. Thus, not entertained. Allowing the netting off the prior period income against the prior period expenditure without ascertaining the nexus between income and expenditure - HELD THAT:- Tribunal held that the Respondent was justified in computing the disallowance after setting off prior period income against the prior period expenses. In fact, the Tribunal noted the fact that for the Assessment Year 2007-08, the Revenue had accepted the net income offered after set off of prior period income with prior period expenses. This is in that year, where expenses of prior period were less than prior period income. We find that the view taken by the Tribunal on the facts cannot be found fault with. This, particularly, as the Revenue for a subsequent period accepted this practice of set off, which resulted in income and subjected it to tax. The basis/ principles for allowing the set off of prior period income with prior period expenses, has to be consistent for years. Therefore, the view taken by the Tribunal cannot be found faulted with. No substantial question of law.
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