TMI Blog2015 (5) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... the said Rule was applicable w.e.f. assessment year 2008-09, as laid down by the Hon’ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] and applying formula for computing disallowance u/s 14A in cases prior to AY 2008-09 where the provisions of Rule 8D of IT rules are not applicable - Decided in favour of assesse. - ITA nos. 2970 & 2971/Del2013, ITA nos. 3278 & 3282/Del2013 - - - Dated:- 15-5-2015 - SHRI S.V. MEHROTRA AND SHRI C.M. GARG: JJ. For the Appellant : Shri Anoop Sharma Adv. For the Respondent : Shri B.R.R. Kumar Sr. DR ORDER PER S.V. MEHROTRA, A.M:- These cross appeals, filed by the assessee as well as the revenue, are directed against separate orders of CIT(A) pertaining to AY 2004-05 2007-08. All these appeals were heard together and are being disposed of by this consolidated order for the sake of convenience. AY 2004-05: 2. Brief facts of the case are that the assessee had filed its return of income declaring Nil income, after claiming brought forward loss to the extent of ₹ 2,70,76,818/-. Tax had been paid on book profit u/s 115JB on ₹ 2,67,27,280/-. Subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e broker, copies of the transfer certificates/ deeds, proof of delivery of shares etc. were filed even after accepting the receipt of ₹ 3 lacs from M/s Garg Finvest (P) Ltd. (e) The purchaser had not produced copies of share certificates, share transfer deeds/ certificates so that the genuineness of the transactions and availability of funds in its own capacity could be examined. (f) M/s Garg Finvest (P) Ltd. had been subjected to certain inquiries and investigation by the Investigation Wind, wherein it was found that they were not carrying on any active business and only providing accommodation entries. 2.3. He, accordingly, made addition of ₹ 3 lacs. 2.4. The AO also made addition of ₹ 7500/- on account of commission being paid by assessee for obtaining the accommodation entries. 2.5. The AO further noted that assessee had earned dividend income. He further observed that no disallowance had been made u/s 14A. Before AO the assessee pointed out that in case any disallowance is to be made, then the same may be to the extent of 10% of the exempt income. In support of this contention, the assessee had relied on the order of Indore Bench of the ITAT in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 147 was bad in law, since the notice u/s 148 had been issued beyond the period of limitation laid down u/s 149(1) of the I.T. Act. The assessee had given detailed submissions, inter alia, pointing out that since the notice u/s 148 dated 28-3-2011 had been served on the assessee company on 30-3-2011 i.e. beyond the period of limitation of 4 years laid down u/s 149(1)(a). Therefore, it was barred by limitation. 4.1. Ld. CIT(A) after considering the assessee s submissions upheld the reopening observing that the original assessment order was passed u/s 143(1) and now the case had been reopened on the basis of information received from Investigation Wing. She did not accept the assessee s contention that the assessee s case did not fall within the ambit of section 194(1)(b) as she had upheld the addition of ₹ 3 lacs and also of commission of ₹ 7500/-. 4.2. Before us the assessee has assailed the invocation of jurisdiction u/s 147, mainly on the ground that once the income alleged to have escaped assessment recorded in the reasons, was not found correct and no addition was made on this count in the assessment order, the assessment was liable to be quashed. 4.3. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng mode for computing the disallowance: Dividend income = ₹ 1,26,61,025/- Business income = ₹ 7,62,03,737/- Ratio of Dividend income to business income: 1,26,61,025 x 100= 16.61% 7,62,03,737 Disallowance u/s 14A: 12661025*16.61%=21,02,996/-. 6.2. Having heard both the parties, we find that since the disallowance has been computed by ld. CIT(A) by applying the methodology laid down by Hon ble Kerala High Court, therefore, no interference is called for in the same. We, accordingly, confirm l. CIT(A) s finding on the issue in question. 7. Ground no. 5 is premature and ground no. 6 is general in nature, requiring no adjudication. 8. In the result, assessee s appeal is dismissed. Revenue s appeal (ITA 3278/Del/2013 AY 2004-05): 9. Sole effective ground raised is as under: The Ld. CIT(A) erred in law and on facts in restricting the disallowance u/s 14A of the Act. 10. While adjudicating assessee s appeal, we have confirmed the action of the ld. CIT(A) in upholding the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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