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Income Tax Appellate Tribunal, MUMBAI BENCH “H”, MUMBAI
Before: SHRI C.N. PRASAD, HONBLE & SHRI RAJESH KUMAR, HONBLE
PER C.N. PRASAD (JM) 1. This appeal is filed by the Revenue against the order of the of the Ld. Commissioner of Income-tax (Appeals) – 2 Mumbai dated 01.03.2016 for the Assessment Year 1998 – 99.
The only issue in the appeal of the Revenue is against estimation of disallowance under section 14A at 2% of the exempt income by the Ld.CIT(A).
2 ITA.No. 4397/MUM/2016 (A.Y:1998-99) M/s. Godavari Corporation Ltd. 3. The Assessing Officer while giving effect to the order passed by the Tribunal u/s. 143(3) r.w.s. 254 of the Act computed the disallowance under Rule 8D (2) r.w.s. 14A of the Act at ₹.52,55,534/-.
On appeal the Ld.CIT(A) in view of the decision of the Hon'ble Jurisdictional High Court in the case of M/s. Godrej Boyce Mfg. Co. Ltd. v. DCIT [328 ITR 81] held that provisions of Rule 8D have no application for the Assessment Year under consideration which is A.Y.1998-99 as the Hon'ble High Court held that provisions of Rule 8D are prospective and are applicable for the Assessment Year 2008-09 onwards. Having said that, the Ld.CIT(A) following the decision of the Hon'ble Jurisdictional High Court in the case of CIT v. M/s. Godrej Agrovet Ltd. in ITA.No. 934 of 2011 dated 08.01.2013 directed the Assessing Officer to compute the disallowance at 2% of the exempt income.
Before us, Ld. DR vehemently supported the orders of the Assessing Officer and on the other hand Ld. Counsel for the assessee relied on the orders of the Hon'ble Jurisdictional High Court and submitted that in the absence of Rule 8D the disallowance computed at 2% is reasonable and this was affirmed by the Hon'ble Jurisdictional High Court.
3 ITA.No. 4397/MUM/2016 (A.Y:1998-99) M/s. Godavari Corporation Ltd. 6. On hearing the both the sides and on perusing the orders of the Authorities below and the decision of the Hon'ble Jurisdictional High Court. We do not find any valid reason to interfere in the order of the Ld.CIT(A) in estimating the disallowance under Section 14A for the Assessment Year 1998-99 at 2% of the dividend income received by the assessee which in our view is reasonable.
In the result, appeal of the Revenue is dismissed.
Order pronounced in the open court on the 23rd April, 2018.