2011 (9) TMI 1090

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ed by the assessee directed against the order of learned CIT(A)-5, Mumbai dated 23.4.2010 for A.Y. 2007-08 on the following grounds:- 1) On the facts and circumstances of the case and in law, learned CIT(A) erred in confirming the disallowance of the expenses of Rs.  40,51,537/- u/s. 14A r.w. rule 8D of Income Tax Act, made by Assessing Officer. The appellant prays that the addition u/s. 1....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e Special bench of the Tribunal in the case of Daga Capital Management Ltd., 26 SOT 603 (Mum)(SB). Jurisdictional High Court in the case of Godrej and Boyce Manufacturing Co. Ltd., 328 ITR 81 (Bom) has reversed the decision of the Tribunal in the case of Daga Capital Management Ltd. and held that Rule 8D can be applied only prospectively. To this extent the order of the learned CIT(A) has to be re....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rest free advances available with the assessee, presumption is that, the investment would have been made, out of interest free funds generated or available with the company. If the interest free funds were sufficient to meet the investment then no disallowance can be made u/s. 14A. The Tribunal in these orders, were following the judgement of Hon'ble Jurisdictional High Court in the case of CI....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....the assessee has made investment from out of interest free funds by applying the proposition laid down by Hon'ble Jurisdictional High Court that the presumption should be that interest free funds, would have been utilized for the purpose of investment. 7. We further observed from the assessment order, that dividend income earned during the year and claimed as exempt u/s. 10(34) of the Act i....