TaxTMI 
TaxTMI 
2010 (10) TMI 705
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....order dated 28.4.2008 for the AY 2002-03. In view of the above submissions of the ld counsel for the assessee, this ground by the assessee is dismissed. 3. Grounds of appeal no.2 by the assessee reads as under: "On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in confirming the disallowance u/s 14A of the Act, certain amount of interest and other expenditure allegedly attributable to tax free income earned on investments made in units of mutual funds." 3.1 Facts of the case, in brief, are that the Assessing Officer disallowed on notional basis interest of Rs.5,80,234/- relating to investment made in shares and 2% of the tax-free income i.e. Rs.25,679/- as relating to administrative expenditure u/s 14A of the I T Act. In appeal, the CIT(A) upheld the action of the Assessing Officer for which the assessee is in appeal here before us. 3.2 The ld counsel for the assessee submitted that during the impugned assessment year, the incremental investment was only Rs.35,73,541/- whereas other investments were made in the past years. Referring to the copy of the order of the Tribunal in assessee's own case for Assessment....
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....ent Year 2008-09; vi) Even prior to Assessment Year 2008-09, when Rule 8D was not applicable the Assessing Officer has to enforce the provisions of sub section (1) of Section 14A. For that purpose, the Assessing Officer is duty bound to determine the expenditure which has been incurred in relation to income which does not form part of the total income under the Act. The Assessing Officer must adopt a reasonable basis or method consistent with all the relevant facts and circumstances after furnishing a reasonable opportunity to the assessee to place all germane material on the record; vii) The proceedings for A.Y. 2002-03 shall stand remanded back to the Assessing Officer. The Assessing Officer shall determine as to whether the assessee has incurred any expenditure (direct or indirect) in relation to dividend income/income from mutual funds which does not form part of the total income as contemplated under section 14A, the Assessing Officer can adopt a reasonable basis for effecting the apportionment. While making that determination, the Assessing Officer shall provide a reasonable opportunity to the assessee of producing its accounts and relevant or germane material havin....
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....ak-up of interest of Rs.14,45,780/- is as under: i) BSES deposits Rs.75,625/- ii) MSEB deposits Rs.25,200/- iii) Water deposits Rs.2,281/- iv) Interest on Housing loan to employees Rs.3,76,642/- v) Interest on I T Refund Rs.8,33,762/- vi) Interest on tax free bonds Rs.1,21,359/- vii) Others Rs.10,911/- 5.3 Based on the arguments advanced by the ld counsel for the assessee, he held that interest income on BSEs deposits (Rs.75,625/-) MSEB deposits (Rs.25,200/-) and water deposits (Rs.2,281/-) interest on housing loan to employees Rs.3,76,642/- as business income. He however, treated the interest on Income Tax refund, interest on tax free bonds as income from other sources. In absence of any details he also treated the other interest income of Rs.10,911/- as income from other sources. Aggrieved with such order of the CIT(A), he assessee is in appeal before us. 5.4 The ld counsel for the assessee referring to the decision of the Tribunal in assessee's own case for the Assessment Year 1996-97 vide ITA No.5340/M/1999 order dated 30.12.2004 and for the Assessment Year 1997-98 vide ITA No.2193/M/2001 order dated 5.7.2004 submitt....
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....der ITA No.4816/M/99 dated 19.11.2003 for the Assessment Year 1996-97 in the appellant's own case has decided the ground in favour of the appellant. Since there is no change in the facts of the case, this year also the appeal on this ground is decided in the appellant's favour." 8. After hearing both the sides, we do not find any infirmity in the order of the CIT(A), who has followed the decision of his predecessor from Assessment Year 1998-99 to 2002-03 as well as the order for Assessment Year 2003-04. Further, the Tribunal has decided the issue in favour of the assessee in assessee's own case for various years. Therefore, respectfully following the decision of the Tribunal in assessee's own case for different years and in the absence of any contrary material brought to our notice; this ground of the revenue is dismissed. 9. Grounds of appeal no.2 by the revenue reads as under: "The Ld CIT(A) erred in holding that the amount of Rs.3,76,642/- being the interest on housing loan received by the assessee be treated as 'profits of business' for the purpose of computation of deduction u/s 8HHC of the Act overlooking the fact that the income received could n....