TMI Blog2010 (10) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... f this judgment of Hon'ble Bombay High Court rendered in the case of Godrej Boyce Mfg. Co. (2010 (8) TMI 77 - BOMBAY HIGH COURT). 5% of the technical know-how fees paid by the assessee to SNIC and Co., Japan - the agreement in question dated 11.5.1973 though initially made for a period of four years is still in operation - The renewal agreement, if any, has not been furnished by the assessee - The fresh terms and conditions applicable to the present asstt. years have not been placed on record, nor the ld. Representative for the assessee was in a position to make any comment thereupon - Further, the assessee has not presented its case with reference to Article 7 and 7.2; and also other articles of the agreement except making a reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, therefore, this rule can't be invoked for AY 06-07. d) Without prejudice to the above, disallowance could be made under rule 8D(2)(ii) only with reference to net interest expenditure of Rs. 2,63,104/- and not gross interest of Rs. 1,11,43,922/- ignoring the interest income of Rs. 1,08,80,818/-. 2. The ld. CIT(A) grossly erred in facts as well as in law in confirming the disallowance of Rs. 6,60,149/- treating it as capital expenditure being net of 25% of technical know-how fees paid to SNIC and Co., Japan amounting to Rs. 56,15,449/- after deducting depreciation at Rs. 3,92,748/- and Rs. 3,50,965/- (14,03,862 - 3,92,748 - 3,50,965) relying on the judgment of Hon'ble Supreme Court in the case of Southern Switchgear Ltd., 232 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which it has been held that rule 8D is not retrospective. Hence cannot be made applicable in AY 2006-07. Thus, to that extant the decision of Spl. Bench in the case of Daga Capital Management P. Ltd. (26 SOT (SB) 603) has been over ruled. The Tribunal now is taking consistent view and restoring matter back to the file of AO to reconsider the disallowance as aforementioned decision of Bombay High Court in the case of Godrej and Boyce Manufacturing P. Ltd. (supra). Recently on 4th April, 2010 similar issue was restored back to the file of AO in ITA No. 215/Del/10 in the case of Kahan International P. Ltd. vs. ITO vide para 5 of the said order in which (both of us are party): - "5. We have heard the submissions of the Ld DR of the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year 2006-07 as in the present case but still disallowance has to be made by the Assessing Officer on reasonable basis. We feel that this matter should go back to the file of the Assessing Officer for a fresh decision on this issue in the light of the judgment of Hon'ble Bombay High Court rendered in the case of Godrej Boyce Mfg. Co. (supra). We, therefore, set aside the order of Ld CIT(A) and restore the matter back to the file of the Assessing Officer for a fresh decision in the light of this judgment of Hon'ble Bombay High Court rendered in the case of Godrej Boyce Mfg. Co. (supra). The Assessing Officer should pass necessary order as per law as per above discussion after providing adequate opportunity of being heard to the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 906/Del/07 dated 26.9.08, a copy of which was placed before us. Paragraph 7 of the order, dealing with the issue, is reproduced below for ready reference: - "7. It was also pointed out in the course of hearing that the agreement in question dated 11.5.1973 though initially made for a period of four years is still in operation. The renewal agreement, if any, has not been furnished by the assessee. The fresh terms and conditions applicable to the present asstt. years have not been placed on record, nor the ld. Representative for the assessee was in a position to make any comment thereupon. Further, the assessee has not presented its case with reference to Article 7 and 7.2; and also other articles of the agreement except making a referen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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