TaxTMI 
TaxTMI 
2016 (12) TMI 458
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....filed by the assessee directed against the order of Commissioner of Income-tax (Appeals)-4, Chennai, dated 12.02.2016 for assessment year 2009-10. Since issues involved in all these appeals are common in nature, these appeals are clubbed together, heard together, disposed off by this common order for the sake of convenience. First we take up appeals for assessment year 2008-09 2. The only issue is with regard to disallowance of deduction u/s.14A of the Act read with Rule 8D of the Income Tax Rules, 1962 at 2% of exempted income as declared by the assessee. 3. The facts of the issue are that the assessee filed an appeal for the same assessment year in ITA No.2087/Mds./2011. In the first round, the Tribunal vide its order dated 25.05.2012 h....
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.... to A.Y2008-09. Even if it was applicable, it should have been applied for the remaining period of the financial year. The Honourable Tribunal (Chennal) in the case of TVS Investments Ltd. In ITA No.160912012(AY 2008-09) has rightly held as follows: "Since the principal contention of the assessee is that section 14A (iii) read with Rule 8D of the Rules has been wrongly applied, we propose to deal with the said contention. For the said purpose, we clarify that the impugned assessment year is 2008-09 and the relevant accounting period is 01.04.2007 to 31.03.2008. It is also clear from a perusal of Rule 8D that the same was notified on 24.03.2008. The moot question accordingly before us is whether Rule 8D as invoked by the Assessing Officer a....
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....d be adopted as disallowance u/s 14A is also rejected. Aggrieved with the order of Ld.CIT(A), both the parties are appeal before us. 5. We have heard both the parties and perused the material on record. The assessment year involved here is 2008-09. Rule-8D of Income Tax Rules, 1962 was introduced with effect from 24.03.2008, which was prospective in operation and cannot be treated as being retrospective as held by the Delhi High Court in the case of Maxopp Investment Ltd. Vs. CIT (347 ITR 272). However, incurring certain administrative expenses cannot be ruled out. Accordingly, by placing reliance on the judgement of the Jurisdictional High Court in the case of Simpson & Co. Ltd in T.C. No.2621/2006,dated 15.10.2012, we are of the opinion ....
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.... of exclusion of investment in subsidiaries for calculating the average value of investment under Rule 8D. Ld.CIT(A) further observed that the AO seems to have taken into account all the relevant factors while calculating the disallowance eu/s.14A including the amount of interest on the borrowed funds. Hence, the Ld.CIT(A) confirmed the action of the ld. Assessing Officer. Aggrieved, the assessee is in appeal before us. 9. We have heard both the parties and perused the material on record. Admittedly for this assessment year Rule-8D is applicable and there should be disallowance u/s.14A read with Rule 8D. However, while considering the applicability of Sec.14A r.w.Rule 8D, the investment made by the assessee in subsidiary companies are not ....