2014 (7) TMI 911

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....vii) of the Act, on the amount of Rs. 2,18,05,392/- being bad debts, the appellant - revenue has preferred this Tax Appeal before this Court to consider the following proposed substantial question of law: "Whether in the circumstances and the facts of the case and in law, the ITAT is justified in allowing claim of bad debts of Rs. 2,18,05, 392/- which has been disallowed by AO and confirmed by CIT(A) ?" 2. The assessee is a co-operative Bank, filed its return of income for the A.Y. 2007-08 declaring income of Rs. 3,78,52,850/-. The return of the assessee was selected under scrutiny assessment and a notice under sec.143(2) of the Act was issued. During the assessment proceedings, the assessee claimed the deduction under section 36(1)(v....

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.... as under: "9. We have heard both of the parties. The Assessing Officer has made the impugned disallowance in terms of Rule 8D of the Income Tax Rules, which on appeal has been confirmed by the Ld. CIT(A). While confirming the impugned disallowance, the Ld CIT (A) has followed the decision of Special Bench of this Tribunal in ITO v. Daga Capital Management, 119 TTJ (Mumbai) (SB) 289 in which it has been held that the provision of Rule 8D were retrospectively applicable as they were procedural in nature. However,the aforesaid view when has not been accepted by the Hon'ble Bombay High Court in Godrej & Boyce Mfg. Co. Ltd. v. DCIT, (2010) 144 Taxman in which it has been held that Rule 8D shall apply with effect from assessment year 2008-09.....