Rule 8D is not applicable on the Assessment year before Rule 8D come in to force

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH “B”, KOLKATA

Before Shri Mahavir Singh, Judicial Member.

and

Shri C.D.Rao, Accountant Member

ITA No.1561/Kol/2008

Assessment Year: 2004-05

Dipajyoti Resouces Pvt. Ltd., Kolkata

(PAN: AAACD 8849 H)

(APPELLANT)

Versus-

I.T.O., Ward-11(4),

Kolkata

(RESPONDENT)

For the Appellant: Shri R.Salarpuria

For the Respondent: Shri A.K.Pramanik

Date of Hearing: 14.12.2011.

Date of Pronouncement: 15.12.2011.

ORDER

Per Shri C.D.Rao, AM

The above appeal is filed by assessee against the order dated 13.06.2008of the ld. CIT(A)-XI, Kolkata pertaining to A.yr.2004-05.

2. Though there are nine grounds raised by assessee there are only two issues involved in this appeal. One issue in ground no.3 is relating to confirmation of disallowance of Rs.25,000/- made by AO and further enhancement of disallowance by Rs.1,56,609/- u/s 14A of the IT Act. The other issue in ground no.6 raised by assessee is relating to part confirmation of the speculation loss to the tune of Rs.2,94,945/-.

3. At the time of hearing before us the ld. Counsel appearing on behalf of assessee has not pressed the issue involved in ground no.6. Therefore the same is dismissed as being not pressed.

4. The only issue raised by assessee is relating to disallowance made u/s 14A of the IT Act.

5. After hearing the rival submissions and on careful perusal of materials available on record keeping in view of the fact that since the assessment year involved in this appeal is relating to A.Yr. 2004-05 as per the decision of the Hon’ble Bombay High Court in the case of Godrej and Boyce Mfg. Pvt. Ltd. (supra) relied upon by the ld. Counsel for the assessee, Rule 8D is not applicable in the assessment year under consideration. This Tribunal has been taking a consistent view of sustaining the disallowance u/s 14A at 1% of the dividend income. Accordingly we direct the AO to disallow 1% of the dividend income as expenditure relevant to earning of dividend income. We order accordingly.

6. In the result the appeal of assessee is partly allowed.

                             Order pronounced in the court on 15.12.2011.

                                     Sd/-                                        Sd/-

                           Mahavir Singh,                            C.D.Rao,

                           Judicial Member                   Accountant Member.

Date: 15.12.2011.

R.G.(.P.S.)

Copy of the order forwarded to:

1. Dipajyoti Resources Pvt. Ltd., C/o A.K.Khemka, 8, Ganesh Ch.Avenue, 1^st floor, Saha Court, Kolkata-700013.

2 The I.T.O., Ward-11(4), Kolkata

3. The CIT, 4. The CIT(A)-XI, Kolkata

5. DR, Kolkata Benches, Kolkata

True Copy,

                                                                                          By order,

Deputy /Asst. Registrar, ITAT, Kolkata Benches