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TMI Blog2013 (8) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... s been confirmed by the ld. CIT(A). 5 Before us, the ld. counsel of the assessee submitted that the issue is covered against the assessee by the order of the Tribunal in earlier years in ITA No. 803/Chd/2011 and 1059/Chd/2011. 6 On the other hand, the ld. DR for the revenue strongly supported the order of the ld. CIT(A). 7 We have heard the rival submissions carefully. We find that identical issue came up for consideration of the Tribunal and the same was decided against the assessee vide para 29 to 33 which read as under: 29. We have heard the rival submissions carefully. We find that the decision of Hon'ble Jurisdictional High Court in the case of CIT V. Hero Cycles Ltd, 323 ITR 518 was rendered for Assessment Year 2004-05. Later on Hon'ble Bombay High Court in case of Godrej and Boyce Manufacturing Co. Ltd V. DCIT, 328 ITR 81 has considered the implications of Section 14A even the constitutional validity and applicability of Rule 8D in great detail ultimately Hon'ble High Court has given the following conclusion: "88 Our conclusion in t his judgment are as follows : (i) Dividend income and income from mutual funds falling within the ambit of section 10(33) of the Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l income as contemplated under section 14A. The Assessing Officer can adopt a reasonable basis for effecting the apportionment. While making that determination, the Assessing Officer shall provide a reasonable opportunity to the assessee of producing its accounts and relevant or germane material having a bearing on the facts and circumstances of the case." 30. The above decision has been rendered after considering the decision of Hon'ble Supreme Court in case of CIT v. Walfort Share and Stock Brokers P Ltd (2010) 326 ITR 1 (S.C), therefore, in our opinion, the ratio of this decision is applicable to the case of the assessee and rule 8D would be applicable in the present case which relates to Assessment Year 2008-09. 31. Though the ld. CIT(A) deleted the addition by observing that investment in mutual fund is out of current account but it was not denied before us that all the receipts are being credited to the current account which means current account is dealing with the combined fund of the assessee-company. The assessee has nowhere shown that the interest free funds were available for investment in mutual fund. In fact before the provision of Section 14A the assessee had the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t expense can be allowed only to the extent that they are relatable to the earning of taxable income. Only those expenses which are in respect of the earning of taxable income can be allowed. The section 14A broadens the theory of apportionment of expenditure between taxable and non-taxable income is evident from the following observations of the Hon'ble Supreme Court: "The theory of apportionment of expenditure between taxable and non-taxable has, in principle, been now widened u/s 14A. Reading section 14 in juxtaposition with sections 15 to 59, it is clear that the words 'expenditure incurred ' in section 14A refers to expenditure on rent, taxes, salaries, interest, etc., in respect of which allowances are provided for (see sections 30 to 37)." Thus on the basis of above, it was held that after introduction of Section 14A, it was possible to apportioned the expenditure between taxable income and exempted income. Rule 8D reads as under: "(1) Where the Assessing Officer having regard to the account of the assessee of a previous year, is not satisfied with - (a) the correctness of the claim of expenditure made by the assessee; or (b) the claim made by the assessee that no expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of ld. CIT(A) and restore that of the Assessing Officer by confirming the disallowance u/s 14A." Following the above we decide this issue against the assessee. 7. In the result, appeal of the assessee is dismissed. ITA No. 1251/Chd/2012 8 In this appeal the Revenue has filed the following ground: "1 That the ld. CIT(A) has erred in law and on the facts in deleting the deduction u/s 80IB of Rs. 86,12,650/- whereas the Assessing Officer has rightly disallow the claim of deduction u/s 80IB of the Income-tax Act, 1961. 2 That the ld. CIT(A) has erred in law and on the facts in deleting the addition of Rs.9,98,060/- made by the Assessing Officer u/s 40A(2)(b) of the Income-tax Act, 1961. 9 After hearing both the parties we find that the assessee had claimed deduction u/s 80IB of the Act which was denied because the investments by the assessee had exceeded the limit of Rs. 1 crore and thus the assessee was no more a small scale industry. 10 On appeal the claim of the assessee was allowed by the ld. CIT(A). 11 On the other hand, the ld. DR for the revenue strongly supported the order of the ld. CIT(A). 12 Before us, the ld. counsel of the assessee submitted that the issue is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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