TMI Blog2012 (7) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue and has accepted the contention of the assessee without verification it is proper to set aside the issue to the file of the AO with the directions to examine the issue afresh - in favour of revenue. - I.T.A.No.1666/Del/2011 - - - Dated:- 29-6-2012 - SHRI R.P. TOLANI, AND SHRI K.D. RANJAN, JJ. Appellant by : Shri R.S. Negi, Sr. DR. Respondent by : Shri S.M. Mathur, CA. O R D E R PER K.D. RANJAN, ACCOUNTANT MEMBER This appeal by the Revenue for Assessment Year 2007-08 arises out of the order of Commissioner of Income-tax (Appeals)-IX, New Delhi. The grounds raised by the Revenue are reproduced as under:- 1. The order of Learned CIT(Appeals) is erroneous contrary to facts law. 2. On the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come which does not form a part of total income under the Act other than share of profits from the firm, the provisions of sub-sec.( 2) of sec. 14A were not applicable. It was also submitted that out of investment of Rs.31.50 crores Rs.2 crores was out of borrowed funds for which disallowance @ 12% per annum of the interest was to be made u/s 14A of the Income-tax Act which worked out to Rs.24,00,000/-. The balance amount of Rs.29.5 lakh was for acquiring 100% share holding of the company/firm for making 100% subsidiary company of the assessee company which is outside the purview of sec. 14A of the Act. Out of other overheads Rs.5,00,000/- was to be disallowed under sec. 14A of the Act. 4. The learned CIT(A) after examining the case held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, the Hon ble High Court of Bombay in the aforesaid cases has also held that even if Rule 8D has no retrospective application prior to assessment year 2008-09, the Assessing Officer would be duty bound to compute the disallowance of application of a reasonable method having regard to all the facts and circumstances of the case. The appellant has submitted that out of the total investment of Rs.31,50,00,000 made during the year, an amount of Rs.29,50,00,000 was invested for acquiring 100% share holding of a company and a firm to make them subsidiaries of the appellant. It was therefore, contended that the said amount of Rs.29,50,00,000 was outside the purview of section 14A of the Act. The above said argument of the appellant has been f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of Hon ble Delhi High Court in the case of Maxopp Investment Ltd., 203 Taxman 364. The assessee had diverted funds for purchase of shares and had paid interest of Rs.6,54,55,465/-. The learned CIT(A) has not examined as to why the disallowance should be made @ 12% of Rs.2,00,00,000/-. Therefore, it was submitted that the matter should be set aside to the file of the AO with the direction to decide the issue afresh. On the other hand, the learned Sr. DR supported the order of the CIT(A). 6. We have heard both the parties and gone through the material available on record. In the appeal before us the assessment year involved is 2007-08. Hon ble Bombay High Court in the case of Godrej Boyce Mfg. Co. Ltd. (supra) has held that pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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