TMI Blog2015 (5) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... rt] in which it was held that the interest ac crues or arises only on the record date or on the maturity date for the purpose of taxability. In the case of the assessee the interest on Bonds were payable on 31s t day of December and 30th day of June and, therefore, the interest for the period ended on 31s t March has not accrued and due to the assessee. In view of this fact, we do not find any infirmity or illegality in the order of the ld. CIT(Appeals).- Decided against revenue. disallowance invoking Rule 8D read with section 14A - CIT(Appeals) in rest ricting the disallowance to 1% of the dividend income - Held that:- Rule 8D has been inserted by the Income Tax (5t h Amendment ) Rules, 2008 w.e.f. 24th March, 2008. Hon’ble Mumbai High Court in the caes of Godrej & Boyce Mfg. Co. Ltd. -vs.- DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] has clearly held that Rule 8D is not ret retrospective but prospective. The impugned assessment is the assessment year 2007-08 while Rule 8D has been inserted w.e. f. 24th March, 2008. Therefore, the Assessing Officer, in our opinion, is not correct in law in allowing the disallowance by applying Rule 8D. We further noted that in the case of Sanjiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion to M/s. Kidar Sons Industries (P) Ltd. in respect of the services rendered by him. - Decided against assesse. - I.T.A. No. 409/KOL/ 2011, I.T.A. No. 287/KOL/ 2011 - - - Dated:- 13-4-2015 - Shri P.K. Bansal And Shri Mahavir Singh JJ. For the Appellant : Shri Vijay Kumar, CIT, D.R. For the Respondent : Shri A.K. Tulsyan, FCA ORDER Per P.K. Bansal : The cross appeal s filed by the Revenue and assessee are out of the order of ld. Commissioner of Income Tax (Appeal s), C-III, Kolkata dated 22.12.2010 for the assessment year 2007-08. 2. Ground No. 1 in Revenue s appeal relates to the deletion of the disallowance of ₹ 18,50,91,037/- on account of retention money retained by the various Government contractees out of the contract value till the establishment of specific performances as specified and issuance of taking over certi ficate. The Assessing Officer during the course of assessment noted that the assessee has c redited the retention money as part of the revenue receipt but while computing the taxable income excluded the same out of the income chargeable to tax. It was also noted that in the earlier year, the assessee was following the merca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not adduce any decision contrary to the one as has been taken by the Hon ble Jurisdictional High Court. In view of the aforesaid decision, we confi rm the order of the ld. CIT(Appeal s) and dismiss the Ground No. 1 taken by the Revenue. 6. Grounds No. 2 3 of the Revenue s appeal relate to the deletion of the addition of ₹ 1,07,41,234/- made on account of interest accrued upto end of the previous year on Government Bonds by admitt ing fresh evidences without giving the Assessing Officer an opportunity to examine the same. 7. The Assessing Officer noted that the auditor has shown the interest income at ₹ 2,48,58,862/-, but in computation the assessee has taken the income at ₹ 42,98,112/- after deducting a sum of ₹ 9,50,000/- claimed as exempt under section 10(15) of the Act. Out of the sum of ₹ 1,96,10,750/- (difference), a sum of ₹ 88,69,516/- was shown as capital gain on sale and purchase of Bonds. There remains a difference of ₹ 1,07,41,234/-. The Assessing Officer treated the same as income of the assessee ignoring the contention of the assessee that though the interest has become due but has not accrued as the interest was payab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer by invoking Rule 8D read with section 14A of the Income Tax Act. 12. When the matter went before the ld. CIT(Appeal s), ld. CIT(Appeals) rest ricted the disallowance to 1% of ₹ 1,36,79,371/- in view of the decision of the Hon ble Calcutta High Court in the case of Sanjiv Jajodia - vs.- DCIT, CC-XIII, Kolkata in ITA No. 1509/Kol/2010. 13. We have heard the rival submissions and carefully considered the same. We noted that the Assessing Officer had disallowed the expenditure by invoking Rule 8D read with section 14A of the Income Tax Act. We noted that Rule 8D has been inserted by the Income Tax (5t h Amendment ) Rules, 2008 w.e.f. 24th March, 2008. Hon ble Mumbai High Court in the caes of Godrej Boyce Mfg. Co. Ltd. -vs.- DCIT reported in 328 ITR 81 (Mum.) has clearly held that Rule 8D is not ret rospective but prospective. The impugned assessment is the assessment year 2007-08 while Rule 8D has been inserted w.e. f. 24t h March, 2008. Therefore, the Assessing Officer, in our opinion, is not correct in law in allowing the disallowance by applying Rule 8D. We further noted that the Hon ble Kolkata Tribunal in the case of Sanjiv Jajodia -vs. - DCIT in ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards the insurance by the contractors, namely DVC, BHEL, ALSTOM totalling to ₹ 7,85,266/- from the bills raised by the assessee. But when we asked the copy of the bill to prove that the deductions have been made towards the insurance expenses, the ld. A.R. expressed his inability to produce the same. In our opinion, when the assessee claims the expendi ture, the onus lies on the assessee to prove the genuinity of the expenses. In view of this fact, we do not find any infirmity or illegality in the order of the ld. CIT(Appeals) sustaining the addition of ₹ 7,85,266/-. We accordingly dismiss the Ground No. 1 taken by the assessee. 19. Ground No. 2 in assessee s appeal relates to the disallowance amounting to ₹ 11,00,000/- on account of the commission payment. 20. The Assessing Officer noted that the assessee has paid commission of ₹ 11,00,000/- to M/s. Kidar Sons Industries (P) Ltd. The Assessing Officer asked the assesee to prove the genuinity of the commission as well as to prove the services rendered by the assessee. The assessee stated that the amount was paid on the basis of oral agreement and the payment was made through cheques after due deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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