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TMI Blog2012 (7) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee accepted the disallowance during the course of assessment proceedings. 2.2 The Appellant Representative during the assessment only provided the details including the computation of possible disallowance u/s 14A read with rule 8D as required by the Ld. Assessing Officer. The assessee had never accepted to the Ld. A.O. that they are liable to the disallowance u/s 14A read with rule 8D. There was no such acceptance by the assessee as indicated by the Ld. A.O. 2.3 The Ld. Commissioner of Income Tax (Appeals) erred and failed to consider that the assessee had never admitted the disallowance u/s 14A read with rule 8D. 2.4 The Ld. Commissioner of Income Tax ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions of the assessee , A.O. made an addition of Rs. 19,77,109/- under Section 14A read with Rule 8D of Income-tax Rules, 1962. 4. In its appeal assailing the above addition before ld. CIT( Appeals), submission of the assessee was that Rule 8D could not be adopted for allocation of expenditure. As per the assessee , it had not incurred any expenditure for earning dividend income. Only expenditure actually incurred could be disallowed and no estimation could be made. Further argument was that the investment on which dividend income was earned was made out of self generated profits and no borrowed funds involved. Ld. CIT( Appeals) was not appreciative of these contentions. According to him, assessee had, during the course of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustries Ltd. (319 ITR 204) . 6. Per contra, learned D.R. strongly supported the orders of lower authorities. 7. We have perused the orders and heard the rival submissions. There is no dispute that Section 14A of the Act and Rule 8D were applicable to the assessee for the impugned assessment year 2008- 09. Hon'ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. v. DCIT (328 ITR 81) had clearly held that computation as per Rule 8D will have to be applied from assessment year 2008-09 onwards. Argument of the assessee is that it had not made any admission with regard to any disallowance to be made in respect of the dividend income earned by it. It is not disputed that a dividend income of Rs. 48 ,45,710 /- was earned by it and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the year for your reference and verification. 5. We bring to your kind attention that the ESI & PF payments were made within the financial year except in case of March 2008 remittance. According to the provisions of section 43B the above payments shall be allowed in the previous year in which they are actually paid. We also bring to your kind attention that as per first proviso if they are paid within the due date of filing the return of income, it shall be allowed in the previous year in which liability arises. In our case, even the amount payable for the month of March 2008 are paid before the due date for filing the return of income. Second proviso to Section 43B providing that PF and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of Revaluation - - Decrease on account of Revaluation - - Average value of Total Assets 3,908,731,255 3,872,641,000 3,890,686,128 Total interest paid as per Books 7,595,000 Specified Amount 539,510 0.5% of the average value of Investments 1,381,873 Disallowance 1,921,283 8. Assessee had itself made a computation of disallowance that could be made under Rule 8D. Against Rs. 19,21,283/- mentioned in the above working, the A.O. has clearly given the working based on Rule 8D at para 2.2 of his order which came to Rs. 19,77,109/-. In our opinion, after giving a computation of possible disallowance under Rule 8D which, inter-alia, included ..... X X X X Extracts X X X X X X X X Extracts X X X X
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