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2015 (11) TMI 7 - ITAT MUMBAI

2015 (11) TMI 7 - ITAT MUMBAI - TMI - Addition u/s. 14A - CIT(A) deleted the addition - Held that:- It is now settled that Rule 8D is applicable from A.Y. 2008-09 by the decision of the Hon’ble High Court of Bombay in the case of M/s. Godrej & Boyce Manufacturing Co. Ltd. [2010 (8) TMI 77 - BOMBAY HIGH COURT]. However, at the same time, the Hon’ble High Court has held that there should be reasonable disallowance. In our considered view, disallowance @5% of the dividend income should meet the end .....

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GH COURT ] which has been followed by the Tribunal in assessee’s own case in A.Y. 2005-06 held VSAT and Lease Line charges paid by the assessee to Stock Exchange were merely reimbursement of the charges paid/payable by the Stock Exchange to the Department of Telecommunication - the VSAT and Lease Line charges paid by the assessee do not have any element of income, deducting tax while making such payments do not arise – Decided against Revenue.

Treatment of Short Term Capital Gain as .....

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e and the assessee against the very same order of the Ld. CIT(A)-8, Mumbai dated 24.8.2010 pertaining to Assessment year 2007-08. Both these appeals were heard together and are disposed of by this common order for the sake of convenience and brevity. ITA No. 7483/M/2010 - Revenue s appeal 2. The first grievance of the Revenue is that the Ld. CIT(A) erred in deleting the addition of ₹ 9,58,760/- made u/s. 14A of the Act. 2.1. During the course of the scrutiny assessment proceedings, the Ass .....

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t applicable for the year under consideration. The Ld. CIT(A) was convinced that applicability of Rule 8D is from A.Y. 2008-09. However, at the same time the Ld. CIT(A) directed the AO to compute the disallowance as per the formula given here under: Total Expenditure (Direct & Indirect) X Value of transaction yielding exempt income Value of Total Transactions 4. Aggrieved by this, the Revenue is before us and assessee is also in appeal against this finding of the Ld. CIT(A) qua ground No. 1 .....

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. 328 ITR 81. However, at the same time, the Hon ble High Court has held that there should be reasonable disallowance. In our considered view, disallowance @5% of the dividend income should meet the ends of justice. We, accordingly direct the AO to restrict the disallowance to 5% of the dividend income. Accordingly ground No. 1 of the Revenue appeal and the assessee s appeal are partly allowed. 8. Ground No. 2 relates to the deletion of the disallowance made u/s. 40(a)(ia) in respect of VSAT cha .....

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bring any distinguish decision in favour of the Revenue. 11. We find force in the contention of the Ld. Counsel. The issues raised vide ground No. 2 have been considered by the Tribunal in assessee s own case in A.Y. 2005-06 and 2006-07 wherein the Tribunal has followed the decision of the Hon ble Bombay High Court (supra). Respectfully following the decision of the Co-ordinate Bench, ground No. 2 is dismissed. 12. In the result, the appeal filed by the Revenue is partly allowed. ITA No. 7695/M .....

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