TMI Blog2016 (10) TMI 249X X X X Extracts X X X X X X X X Extracts X X X X ..... reimbursement' does not fall under any of the categories specified u/s. 40(a)(ia)? - Held that:- In the present case, the impugned order of the Tribunal prima facie proceeds on the basis that it is an undisputed position that the amount paid by the Respondent Assessee to M/s. Mafatlal Industries was in the nature of reimbursement of expenses. This without considering the grievance of the Revenue that the amount paid to M/s. Mafatlal Industries Ltd. is not reimbursement of expenses. We were inclined to restore this issue to the Tribunal for fresh consideration. However, the Counsel for the Revenue resisted a remand at this stage and expressed a view that at the final hearing he would be able to succeed before this Court without a remand. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs of the CIT(A) that the payment made on the service rendered to the assessee was not reimbursement in nature? 4. Regarding Question (a) : (i) Mr. Ahuja, learned Counsel appearing for the Revenue, states that the question as formulated raises two issues one with regard to invoking of Rule 8D of the Income Tax Rules 1961 (the Rules) while computing the disallowance of expenditure under Section 14A of the Act for the Assessment Year 200708 and second the disallowance of expenditure under Section 14A of the Act at 5% on reasonable basis. (ii) So far as the first issue is concerned, Mr. Ahuja fairly states that it stands concluded against the Revenue by the decision of this Court in Godrej And Boyce Mfg. Co. Ltd. vs. Deputy Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urbed the order of the Commissioner of Income Tax (Appeals), who while applying the test of reasonable disallowance, disallowed the expenditure at 5% of the exempted income. This was by following the decision of the Tribunal in M/s. VIP Industries Ltd. vs. DCIT. ITA No.7242/Mum/2008 Thus, the disallowance under Section 14A of the Act is reasonable in the absence of the Revenue showing the same to be perverse. (vi) In the above view, question (a) as formulated does not give rise to any substantial question of law. Thus, not entertained. 5. Appeal admitted on substantial question of law at (b). 6. The aforesaid question (b) is admitted notwithstanding the fact that Mr. Dave, learned Counsel appearing for the Assessee, placed reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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