TMI Blog2013 (1) TMI 864X X X X Extracts X X X X X X X X Extracts X X X X ..... no.8728/Mum./2010, is directed against the impugned order dated 1st October 2010, passed by the learned Commissioner (Appeals) XXI, Mumbai, for the quantum of assessment passed under section 143(3) Act, for the assessment year 2007 08. Since grounds raised by either party are common, therefore, these were heard together and, as a matter of convenience, are being disposed off by way of this consolidated order. 2. In the aforesaid appeals, the common issue raised is the disallowance of expenditure made under section 14A of the Act. In the assessment year 2007-08, the Revenue has preferred an appeal whereas in assessment year 2008-09, the appeal has been preferred by the assessee which is against part disallowance. 3. We first take up R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of section 14A, r/w Rule-8D, should not be invoked. In response, the assessee submitted that it has not incurred any specific expenditure in earning of the dividend. The Assessing Officer applied the provision of Rule-8D, and computed the disallowance at ₹ 15,38,089, as against dividend income of ₹ 46,655, and added the same to the income of the assessee. 5. Before the Commissioner (Appeals), it was argued on behalf of the assessee that the application of Rule-8D, prior to assessment year 2008- 09, has been held to be not applicable in view of the judgment of the Hon ble Bombay High Court in Godrej Boyce Mfg. Co. Ltd. v/s DCIT, (2010), 328 ITR 081 (Bom.). On merits, the assessee had submitted detailed break-up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in Godrej Boyce Mfg. Co. Ltd. (supra). He further submitted that on a dividend income of ₹ 46,000, such a huge disallowance cannot be made. The learned Counsel also brought to our notice that in assessment year 2006-07, the Tribunal has restored back this issue to the file of the Assessing Officer to decide the issue in the light of the judgment of Godrej Boyce Mfg. Co. Ltd. (supra). 8. After carefully considering the rival contentions and on perusal of the orders passed by the authorities below and the material available on record, we, first of all, hold that the provisions of Rule-8D, cannot be made applicable for working out any kind of disallowance under section 14A, in the assessment year 2007-08. Secondly, on p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee has not apportioned the expenditure against the same. In response to the show cause notice, the assessee worked out the disallowance under Rule-8D, at ₹ 10,469. The Assessing Officer rejected the said explanation on the ground that the disallowance made by the assessee under Rule 8D, is not in accordance with the law. He worked out the disallowance of ₹ 22,37,989, as per the working given at Pages-7 and 8 of the assessment order. 12. Before the Commissioner (Appeals), it was argued that a part of the investment of ₹ 1.06 crores were not related to exempt income, therefore, the same should be excluded from the disallowance of section 14A. Regarding disallowance of interest expenditure of ₹ 21,05,426, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable, however, items relating to the expenditure specifically the interest expenditure attributable to earning of exempt income has not been properly looked into. Therefore, in the interest of justice, we are of the considered opinion that this issue needs to be restored back to the file of the Assessing Officer to examine the issue afresh. Consequently, we set aside the impugned order passed by the learned Commissioner (Appeals) and restore back the issue to the file of the Assessing Officer who will consider the assessee s explanation and the working given before the Assessing Officer as well as by the learned Commissioner (Appeals). The assessee is also directed to provide relevant details to the Assessing Officer for adjudication ..... X X X X Extracts X X X X X X X X Extracts X X X X
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