2011 (6) TMI 987

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.... of CIT(A) - II, Ludhiana dated 24.2.2011 relating to assessment year 2007-08 against the order passed under sect ion 143(3) of the I.T. Act , 1961. 2. The only ground of appeal raised by the assessee is as under; - That the Ld. CIT(A)-II Ludhiana has wrongly confirmed adhoc disallowance of indirect expenses at ₹ 50,000/ - under Rule 8D. 3. Despite service of notice, none appeared on beha....

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....t the expenditure incur red in relation to the earning of exempt income. The explanation of the assessee was that there were no fresh investments in shares during the year and only eight dividend war rants were received during the year under consideration. It was claimed that no expenditure was incur red in relation to the said investment during the year. The Assessing Officer rejecting the explan....

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....e to the year under appeal. The constitutional validity of Sect ion 14A(2)&(3) of I.T. Act and Rule 8D of the Income Tax Rules was challenged before the Hon'ble Bombay High Court in Godrej & Boyce Mfg. Co. Ltd V DCIT & Anr, [234 CTR 1(Bom)]. The Court held that the provisions of Rule 8D were not ultra virus the provisions of Sect ion 14A and it was also held that the same do not of fend Articl....