TMI Blog2017 (4) TMI 1459X X X X Extracts X X X X X X X X Extracts X X X X ..... AO to re-compute the disallowance under section 14A of the Act afresh, in accordance with the law prevalent for the year under consideration, after affording the assessee adequate opportunity of being heard and to file details/submissions required in this regard. Assessee's appeal are treated as allowed for statistical purposes. Disallowance of interest on loans to subsidiaries - HELD THAT:- Assessee stated that loans and advances which are under consideration have already been considered by the Tribunal in earlier years and decided the issue in favour of assessee allowing the claim of the assessee. The assessee stated that the issue now stands covered in favour of assessee. On the other hand, the learned Sr. DR fairly conceded tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Rule 8D is applicable only for and from AY 2008-09 and not for the relevant assessment year 2006-07. Assessee is in appeal against the order of CIT(A) in not considering the submissions of the assessee. 3. At the outset, the learned Counsel drew our attention to Para 4.2 of CIT(A) s order which reads as under: - 4.2 1 have considered the A.O.'s order as well as the appellant's AIR submission. I have also taken note of the case law in the ease of Godrej Boyce Mfg. Co. Ltd v/s. DCIT [2010]. Taking note of these facts, I am of the considered view that Rule 8D is applicable only for A.Y.-08-09 onwards. In view of the same, the application of rule 8D cannot be upheld, in view of the jurisdictional High Court decision. However ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties and perused the material available on record. As could be seen, the learned Commissioner (Appeals) while deciding the issue of disallowance under section 14A has directed the Assessing Officer to compute it by applying rule 8D. However, as held by the Hon'ble Jurisdictional High Court in Godrej Boyce Mfg. Co. Ltd. v/s DCIT, [2010], 328 ITR 081 (Bom.), the provisions of rule 8D is applicable prospectively from the assessment year 2008 09 onwards. The Hon'ble Jurisdictional High Court in the said decision has also observed that for prior assessment years disallowance under section 14A can be worked out on a reasonable basis. We have noted, identical issue arose in assessee s own case for the assessment year 2004 05. The Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds no.(i) and (ii) are allowed for statistical purposes. 5. On query from the Bench the learned Sr. DR fairly conceded the position and stated that she has no objection in case the matter remanded back to the file of the AO denovo. In view of the above facts and circumstances we set aside the orders of the lower authorities and restore the matter back to the file of the AO for fresh adjudication on the issue in term of the orders of the Tribunal in AY 2004-05 and 2005-06. On this issue, the appeal of assessee in ITA No. 5539/Mum/2011 is remanded back to the file of the AO and allowed for statistical purposes. Revenue s appeal in ITA No. 5535/Mum/2011 is dismissed. 6. The one more issue in ITA No. 5539/Mum/2011 for AY 2006-07 of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that in the absence of any verification that the advances to the subsidiary companies was only out of self generated income, assessee s claim cannot be accepted. In this context, it is necessary to observe, the Assessing Officer in Para 3.5 of the assessment order has mentioned that the total funds available with the assessee amounted to ₹ 370,18,68,522, out of which, ₹ 167,20,18,599, was borrowed funds. Thus, from the aforesaid figures, it is very much evident that the assessee was having sufficient self generated / interest free funds available with it to make interest free advance of ₹ 25,67,46,923. In fact, the learned Commissioner (Appeals) has also observed, advances have been made out of common funds available wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006-07, i.e. appeal of Revenue and the appeal of assessee, these two appeals are against the orders of Tribunal which was given effect by the AO in regard to disallowance of expenses relatable to exempt income under section 14A of the Act. Since, we have already set aside this issue back to the file of the AO in main appeal of the assessee in ITA No. 5539/Mum2/2011 and Revenue in ITA No.5535 /Mum/2011 is dismissed, these two appeals have become infructuous and hence dismissed. 10. In the result, the appeal of Assessee in ITA No. 5539/Mum/2011 is partly allowed for statistical purpose and all other three appeals i.e. the appeal of assessee in ITA No. 3768/Mum/2013 and Revenue s appeals i.e. in ITA Nos. 5535/Mum/2011 and 3774/Mum/2013 ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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