2017 (7) TMI 863

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.... petitioner which were in turn based on the legal interpretation of the subject law contained in section 14A of the Act while holding that the Rule 8D of the Income tax Rules, 1962, are not applicable for the assessment year 2007-08 which Rule is applicable from the assessment year 2008-09 for the first time, thus failing to follow the mandate of law as laid down by the courts, 2. That on the facts and in the circumstances of the petitioner firm's case, the learned Commissioner of income tax (Appeals) 18, New Delhi erred in law and on facts in not following her own appellate order passed on 16-11-2010 in appeal no. 295/08-09, for the assessment year 2006-07 in the petitioner's own case, even though there being no change in ....

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....tax Rules, 1962 which sub rule 8(ii) became applicable from the assessment year 2008-09 onwards. 5. That on the facts and in the circumstances of the petitioner firm's case, the learned Commissioner of income tax (Appeals) 18, New Delhi erred in law and on facts in upholding the disallowance of Rs. 225831 under section 14A of the Act read with rule 8D(iii) of the Income tax Rules, 1962 which sub rule 8(iii) became applicable from the assessment year 2008-09 onwards. 6. That on the facts and in the circumstances of the petitioner firm's case, the learned Commissioner of income tax (Appeals) 18, New Delhi erred in law and on facts in upholding the arbitrary and adhoc disallowances of, (a) Rs. 240025 being 20% of expe....

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....the return of income on 21.11.2007 declaring a loss of Rs. 19,15,353/- which was processed u/s 143(1) of the Act. Later on, the case was selected for scrutiny. During the course of assessment proceedings, the AO noticed that the assessee earned income on the redemption of mutual fund as long term capital gains claimed as exempt u/s 10(38) of the Act amounting to Rs. 35,77,604/- and the dividend income of the units of mutual funds of Rs. 24,31,365/- exempt u/s 10(34) of the Act but had not shown any expenditure related to the exempt income of Rs. 60,08,969/- (Rs.35,77,604/- + Rs. 24,31,365/-). The AO also observed that the assessee had taken loan of Rs. 3,67,84,674/- for the purpose of purchase of units of Templeton Mutual Fund from the Amer....

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....arried the matter to the ld. CIT(A) who sustained the additions made by the AO. 6. Now the assessee is in appeal. The ld. Counsel for the assessee submitted that the main additions were made by the AO by applying the provisions contained in Rule 8D of the Income Tax Rules, 1962 which is not applicable for the year under consideration because it was operated for the assessment year 2008-09. The reliance was placed on the judgment of the Hon'ble Jurisdictional High Court in the case of Maxopp Investment Ltd. Vs CIT reported in (2012) 347 ITR 272. It was also submitted that other additions were also made by the AO and sustained by the ld. CIT(A) without any basis. 7. In her rival submissions the ld. Senior DR strongly supported the order....