Appeal challenging tax order dismissed, disallowance under Rule 8D(2) upheld.

The High Court dismissed the appeal challenging the Income Tax Appellate Tribunal's order for A.Y. 2006-07. The Court upheld the deletion of disallowance under Rule 8D(2) r.w.s. 14A of the Act, citing the settled legal position established in a specific court decision. It was determined that the issues raised did not give rise to any substantial question of law, leading to the dismissal of the appeal without costs.

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Issues:
Challenge under Section 260A of the Income Tax Act, 1961 on order passed by the Income Tax Appellate Tribunal for A.Y. 2006-07. Questions of law raised regarding the deletion of disallowance under Rule 8D(2) r.w.s. 14A of the Act and reliance on a specific court decision.

Analysis:

1. Disallowance under Rule 8D(2) r.w.s. 14A of the Act:
The Tribunal's order was challenged on the grounds of deleting the disallowance made under sub clause (ii) of Rule 8D(2) r.w.s. 14A of the Act. The High Court noted that the impugned order relied on the decision in the case of Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT (2010) 328 ITR 81 (Bom.) to hold that Rule 8D would not be applicable for disallowance under Section 14A of the Act for assessments before A.Y. 2008-09. The Court observed that the disallowance should be made on a reasonable basis rather than applying Rule 8D for the relevant Assessment Year 2006-07. The issues were considered concluded by the decision in Godrej & Boyce Mfg. Co. Ltd., and the questions raised did not give rise to any substantial question of law, leading to the dismissal of the appeal.

2. Reliance on Specific Court Decision:
The Tribunal's reliance on the decision in Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT (2010) 328 ITR 81 (Bom.) was a significant aspect of the challenge. The High Court acknowledged that both parties agreed that the issues in question were settled by the mentioned court decision, which was followed by the impugned order. Consequently, the Court found that the framed questions did not present any substantial question of law for consideration, resulting in the dismissal of the appeal without any order as to costs.

In conclusion, the High Court's judgment in the present case addressed the challenge under Section 260A of the Income Tax Act, 1961 concerning the Tribunal's order for A.Y. 2006-07. The analysis focused on the disallowance under Rule 8D(2) r.w.s. 14A of the Act and the reliance on a specific court decision, ultimately leading to the dismissal of the appeal based on the settled legal position established by the referenced court decision.

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