https://www.taxtmi.com/caselaws?id=782885 HC held that Rule 8D under s.14A is prospective and cannot be applied to assessment years prior to AY 2008-09. Since the AO had erroneously invoked Rule 8D for an earlier year, the disallowance made was unsustainable. HC upheld ITAT's order setting aside the CIT(A) and remanding the matter to the AO for fresh consideration of the assessee's claim of expenditure incurred in earning exempt income. HC further approved ITAT's direction that any disallowance must not exceed 5% of the exempt income, treating this percentage as a reasonable ceiling consistent with earlier precedents and the assessee's own prior year. en-us Wed, 26 Nov 2025 00:00:00 +0530 Fri, 05 Dec 2025 08:12:37 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=782885 HC held that Rule 8D under s.14A is prospective and cannot be applied to assessment years prior to AY 2008-09. Since the AO had erroneously invoked Rule 8D for an earlier year, the disallowance made was unsustainable. HC upheld ITAT's order setting aside the CIT(A) and remanding the matter to the AO for fresh consideration of the assessee's claim of expenditure incurred in earning exempt income. HC further approved ITAT's direction that any disallowance must not exceed 5% of the exempt income, treating this percentage as a reasonable ceiling consistent with earlier precedents and the assessee's own prior year. Case-Laws Income Tax Wed, 26 Nov 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=782885