2013 (10) TMI 922

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....on of disallowance made under section 14 A of the income tax act. 2. The brief facts are that during the relevant assessment year, the assessee had earned certain dividend income and long term capital gain, which was claimed exempt from income tax. The assessee had not allocated any expenditure for earning of above said tax free income. The AO determined the amount of expenditure as per the provisions of Rule 8D at Rs.1065080/- and added back the same into the income of the appellant. 3. In first appeal, the Ld. CIT(A) relying upon judgment of the Hon'ble Bombay High Court in Godrej & Boyce Ltd. Mfg. Co. Vs. DCIT [(2010) 328 ITR 81 (Bom)] observed that Rule 8 D was not applicable for A.Y. under consideration i.e. 2007-08 and that the ....

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....g dividend income and the dividend income was incidental to the sale of shares which remained unsold by the assessee. His further contention has been that it cannot be said that the expenditure incurred in acquiring the shares has to be apportioned to the extent of dividend income and that should be disallowed from deduction. He further contended that the disallowance of expenditure in relation to dividend received from trading of shares cannot be made. His further contention has been that the provisions of section 14A read with Rule 8D were not applicable in the case of the appellant as no expenditure had been incurred to earn tax free dividend income. On the other hand the ld. DR has relied upon the authorities below. 6. We have consid....

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.... issue under consideration. 9. Subject to our observations made above, this appeal of the assessee is allowed for statistical purposes. ITA No.2579/Mum/12 for A.Y. 2008-09 The only distinguishable fact in this appeal is that the same pertains to A.Y. 2008-09 and as per the law laid down by the Hon'ble Bombay High Court in Godrej & Boyce Ltd. Mfg. Co. VS. DCIT(Supra) Rule 8D is applicable for this year. 10. The CIT(A) in this case confirmed the disallowance made by the A.O. under Rule 8D of the Income Tax Rules. 11. The contention of the ld. AR has been that the AO without recording any dissatisfaction with regard to the computation made by the assessee, straightway applied Rule 8D. His second contention has been the same for ....