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2018 (11) TMI 1060 - HC - Income TaxDisallowance u/s 14A - calculation of disallowance of expenditure attributable to exempted income to be made under Section 14A - whether for assessment year 2006-07 the assessing Officer could rely upon Rule 8D of the Rules for working out the disallowance of expenses under Section 14A? - Held that:- Rule 8D of the Rules is prospective in operation and could not have been applied to any assessment prior to assessment year 2008-09. Hence, the issue is decided against the revenue. Whether the Tribunal was justified in restricting the disallowance made under Section 14A of the Act to ₹ 5 lakhs without any sound and valid reason, the same need not be gone into as the assessee-company has not challenged the order. Moreover, it would be pertinent to mention here that the AO in the assessment order recorded that there is no prescribed method for working of disallowance and thereafter only relied upon Rule 8D of the Rules.
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