DCIT, CC-II, Kolkata, Kolkata V. M/s. Avani Projects & Infrastructure Ltd., Kolkata

ITA 700/KOL/2011

• Counselvise Citation: [2013] 119 COUNSELVISE.COM (IT) 2938 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2013
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 09-05-2011
• Court: TRIBUNAL
• Department Lawyers: L K S DEHIYA
• Keywords: Search and seizure; Document seized; Earning of tax free income; Source of fund; Documents seized
• Section: 14A; 132

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE . . . . . . . . , /AND ! '! , ) [BEFORE SHRI P. K. BANSAL, AM & SHRI MAHAVIR SINGH, JM] # # # # / I.T.A NO. 700/KOL/2011 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR: 200 7- 0 8 DEPUTY COMMISSIONER OF INCOME-TAX, VS. M/S. AVANI PROJECTS & INFRASTRUCTURE LTD. CENTRAL CIRCLE-II, KOLKATA. (PAN: AAFCA4259H) ()* /APPELLANT ) (+,)*/ RESPONDENT ) DATE OF HEARING: 20.03.2013 DATE OF PRONOUNCEMENT: 20.03.2013 FOR THE APPELLANT: SHRI L. K. S. DEHIYA, CIT (DR) FOR THE RESPONDENT: SHRI RAVI TULSIYAN, FCA - / ORDER PER BENCH: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A), CENTRAL-III, KOLKATA IN APPEAL NO. 162/CC-II/CIT(A)C-III/09-10 DATED 18.02.2011. A SSESSMENT WAS FRAMED BY DCIT, CC_II, KOLKATA U/S. 153A/143(3) OF THE INCOME-TAX ACT, 196 1 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2007-08 VIDE HIS ORDER DATED 31.12. 2009. 2. THE FIRST ISSUE IN THIS APPEAL OF REVENUE IS AG AINST THE ORDER OF CIT(A) DELETING THE ADDITION OF RS. 2 CR. MADE BY AO ON ACCOUNT OF UNEX PLAINED PAYMENTS MADE TO SHRI VINODE DUGAR FOR THE SALWA PROJECT AND SEIZED DOCUMENTS FO UND DURING THE COURSE OF SEARCH. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.1: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A HAS ERRED IN DELETING THE ADDITION OF RS.2,00,00,000/- (RUPEE S TWO CRORES) MADE ON ACCOUNT OF UNEXPLAINED PAYMENT MADE TO SHRI VINODE DUGAR FOR T HE SALWA PROJECT WITHOUT PROPER APPRECIATION OF THE EVIDENCES ADDUCED BY THE DOCUME NTS SEIZED IN COURSE OF SEARCH AND RELIED UPON IN THE ASSESSMENT. 3. BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED U/S. 132 OF THE ACT ON THE BUSINESS PREMI SES OF THE ASSESSEE COMPANY AT 59A, CHOWRINGHEE ROAD, KOLKATA AS WELL AS RESIDENTIAL PR EMISES OF THE DIRECTORS OF THE COMPANY KNOWN AS AVANI GROUP OF COMPANIES AS ON 30.08.2007. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF REAL ESTATE, PROMOTERS AND DEVELOPE RS AT KOLKATA. DURING THE COURSE OF SEARCH AND SEIZURE OPEATION AT THE OFFICE PREMISES OF THE ASSESSEE COMPANY CASH BOOK, BOOKS OF ACCOUNT AND OTHER DOCUMENTS WERE FOUND AND SEIZED. THE ISSUE UNDER DISPUTE BEFORE US IS NOW 2 ITA NO.700/K/2011 AVANI PROJECTS & INFRASTRUCTURE LTD. AY: 2007-08 DOCUMENT AD-6 AT PAGE 10 OF SEIZED DOCUMENT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AO NOTED THAT PERUSAL OF PAGES 2 AND 121 OF AD-6 CO NTAIN DETAILS OF PAYMENT OF RS.7 CR. TO MR. VINODE DUGAR RELATING TO SALWA PROJECT. ACCORDING TO AO, AT PAGE 2 OF AD-6 A SUM OF RS.5 CR. + RS.2 CR. WAS PAID TO MR. VINODE DUGAR FOR SALWA PROJECT. THE ASSESSEE WAS ASKED TO EXPLAIN THE TRANSACTION OF RS. 7 CR. AS RECORDED IN THE BOO KS OF ACCOUNT OF THE ASSESSEE FOR THE SALWA PROJECT. ASSESSEE BEFORE THE AO SUBMITTED FOLLOWIN G EXPLANATIONS: PAYMENTS WERE MADE TO VINOD DUGAR BY APIL ON ACCOU NT OF SALWA PROJECT AS UNDER AS RECORDED IN THE BOOKS: CHQ 389914 DATED 07.06.06 RS.3,00,00,000/- CHQ 030574 DATED 31.07.06 RS.2,00,00,000/- TOTAL RS.5,00,00,000/- APIL HAD FURTHER ISSUED CHEQUES OF RS.2 CRORES GTO MR. VINOD DUGAR WHICH WAS SUPPOSED TO BE ENCASHED ON THEIR PROVIDING THE REGISTRATION OF LAND. SINCE THE REGISTRATION WAS NOT PROVIDED, THE CHEQUES WERE NOT ENCASHED. BALANCE OF RS. 3 CRORE WHICH WAS DUE, WAS NEVER PAID. REFERENCE IS DRAWN TO PAGE 10 OF AD/6 WHERE TWO AMOUNTS OF RS.5 EACH HAVE BEEN SEPARATELY MENTIONED UNDER CHEQUE COLUMN. HEN CE, IT IS CLEAR THAT NOTHING WAS PAID IN CASH IN RESPECT OF SALWA PROJECT. THE AO EXAMINED THE ASSESSEES EXPLANATION WITH RES PECT TO SEIZED DOCUMENTS AND FOUND THAT ASSESSEE HAS PAID RS.5 CR. + RS.2 CR. I.E. RS.7 CR. AND ASSESSEE ACTUALLY EXPLAINED ONLY RS. 5 CR. AS RECORDED IN ITS BOOKS OF ACCOUNT. HENCE, BALANC E RS.2 CR., ASSESSEE COULD NOT EXPLAIN SATISFACTORILY AND MADE ADDITION BY OBSERVING AS UN DER: THE SUBMISSION OF THE ASSESSEE COMPANY WAS EXAMINE D WITH RESPECT TO THE SEIZED DOCUMENTS AND IT WAS FOUND THAT RS. 5 + 2, THAT IS, RS.7 CRORE WAS ACTUALLY PAID. REFERENCE DRAWN TO THE PAGE 10 OF AD/6 IS ALSO NOT ACCEPTABLE. IN VIEW OF THE ABOVE, THE ASSESSEE FAILS TO EXPLAIN SATISFACTORILY THE PA YMENT OF RS.2 CRORE TO MR. VINOD DUGAR ON A/C OF SALVA AND THE SAME IS TREATED AS UN DISCLOSED INVESTMENT OF THE ASSESSEE AND ADDED TO ITS TOTAL INCOME. 4. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT (A), WHO DELETED THE ADDITION VIDE PARA 9 OF HIS ORDER AS UNDER: 9. I HAVE CARFULLY CONSIDERED THE SUBMISSIONS FILE D BY THE APPELLANT AND PERUSED THE ASSESSMENT ORDER. I HAVE ALSO EXAMINED THE COPIES OF THE SEIZED DOCUMENTS AND HAVE FOUND THAT THE SEIZED DOCUMENTS DO NOT ANYWHERE MEN TION THAT THE AMOUNT OF RS. 2 CRORES OVER AND ABOVE THE AMOUNT OF RS. 5 CRORES PA ID BY CHEQUE HAD BEEN PAID IN CASH. I HAVE ALSO EXAMINED THE RELEVANT LEDGER COP IES IN RESPECT OF THE CHEQUE OF RS. 2 CRORES ISSUED BY THE APPELLANT AND HAVE FOUND THAT THE SAD TRANSACTION STANDS DULY RECORDED IN THE BOOKS OF THE APPELLANT. I HAVE ALSO FOUND THAT THE TRANSACTION OF RS. 5 CRORES ALSO STANDS SEPARATELY RECORDED IN THE BOOKS OF THE APPELLANT. I HAVE ALSO EXAMINED THE BANK BOOK AND BANK STATEMENTS OF THE A PPELLANT AND FIND THAT THE PAYMENT OF THE ENTIRE AMOUNT OF RS. 7 CRORES STANDS REFLECT ED IN THE BANK BOOK MAINTAINED BY THE APPELLANT AND DULY FILED BEFORE THE A.O. EVIDENCE O F WHICH HAS BEEN FURNISHED BEFORE ME. THE AMOUNT OF RS. 5 CRORES ALSO STANDS DULY REF LECTED IN THE BANK STATEMENT OF THE APPELLANT. THE APPELLANT ALSO FILED COPY OF THE REL EVANT PAGE OF THE BANK CHEQUE BOOK WHEREIN THE DETAILS IN REPECT OF THE CHEQUE ISSUED AND CANCELLED STANDS DULY NOTED. THE APPELLANT HAS ALSO FILED COPIES OF ITS CORRESPONDEN CE WITH VINOD DUGAR IN RESPECT OF THE 3 ITA NO.700/K/2011 AVANI PROJECTS & INFRASTRUCTURE LTD. AY: 2007-08 CHEQUE OF RS.2 CRORES. I HAVE ALSO EXAMINED THE LED GERS, BANK BOOKS AND BANK STATEMENTS OF THE APPELLANT AND HAVE FOUND THAT THE CHEQUE OF RS. 2 CRORES HAS BEEN SUBSEQUENTLY CANCELLED AND HAS BEEN DULY RECORDED I N THE BOOKS OF THE APPELLANT AND EVEN THE AMOUNT OF RS. 5 CRORES PAID HAS BEEN REFUN DED BY VINOD DUGAR TO THE APPELLANT SINCE THE SALWA PROJECT WAS CANCELLED AS EXPLAINED BY THE APPELLANT. THEREFORE, THERE IS NO REASON TO DISBELIEVE THE EXP LANATION OF THE APPELLANT THAT THE AMOUNT OF RS. 2 CRORES WAS ALSO PAID BY CHEQUE BUT THE SAME HAD NOT BEEN ENCASHED BY VINOD UGAR AND WAS RETURNED SNCE THE PROJECT WAS SHELVED. ALL THE TRANSACTIONS INCLUDING TRANSACTION IN RESPECT OF THE AMOUNT OF R S. 2 CRORES STANDS DULY RECORDED IN THE BOOKS OF THE APPELLANT AND THEREFORE, THERE WAS NO BASIS FOR NOT ACCEPTING THE EXPLANATION OF THE APPELLANT. THE EXPLANATION OF TH E APPELLANT IS FORTIFIED BY THE REFUND OF ALL OTHER ADVANCES ALSO GIVEN TO VINOD DUGAR WHI CH WERE ENCASHED AND WHICH HAVE BEEN ACCEPTED AS CORRECT BY THE A.O. IF THE A.O. HA D ANY DOUBT IN RESPECT OF THE SAID AMOUNT OF RS. 2 CRORES THEN THE BEST COURSE OF ACTI ON WOULD HAVE BEEN TO EXAMINE VINOD DUGAR AND RECORD HIS STATEMENT IN RESPECT OF THE SAME BUT THE A.O. HAVING NOT DONE SO CANNOT PROCEED ON ASSURNPTION AND ADD THE A RNOUNT IN THE HANDS OF THE APPELLANT MORE SO WHEN IT IS CLEAR FROM THE EVIDENC ES FILED BY THE APPELLANT THAT THE EXPLANATION GIVEN BY IT IS PERFECTLY TENABLE. THERE FORE, I HOLD THAT THE ADDITION OF RS. 2 CRORES MADE BY THE A.O. IS NOT CORRECT AND ACCORDIN GLY DELETE THE SAME. 5. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE US. B EFORE US, ASSESSEE PRODUCED PHOTO COPY OF AD-6 PAGE 10, WHICH READS AS UNDER: VD A/C 23.08.07 CHEQUE CASH TOTAL BFM 8.50 5.40 13.90 ENIC 10.00 2.20 17.70 3.00 2.50 SALVA 5.00 5.00 _____ ______ 34.50 7.60 31.60 FURTHER, THE ASSESSEE ALSO PRODUCED SEIZED DOCUMENT S AD-6 PAGE 6 AND THE RELEVANT PORTION READS AS UNDER: SALVA 1. 5 + 2 PAID SEEKING OF 66 CR. TO CS BAL. 3 DUE , HE ILL GIVE CS 50% OF TOTAL AG. + MOU + . 50% 6. THE ASSESSEE HAS ALSO FILED LEDGER COPY OF VINOD DUGAR IN THE BOOKS OF ASSESSEE AND CORRESPONDENCE WITH SHRI VINDO DUGAR AT PAGE 6 TO 8 , WHEREIN IT IS EXPLAINED THAT NO DOUBT THE CHEQUE BEARING NO.486076 DATED 25.09.2006 DRAWN ON ANDHRA BANK,BALLYGUNGE BRANCH, KOLKATA FOR AN AMOUNT OF RS. 2 CR ISSUED IN FAVOUR OF SHRI VINDO DUGAR TOWARDS ADVANCE OF 4 ITA NO.700/K/2011 AVANI PROJECTS & INFRASTRUCTURE LTD. AY: 2007-08 SALWA PROJECT BUT SAME WAS NOT DEPOSITED TO THE BAN K BY HIM AS THE REGISTRATION OF LAND WAS NOT COMPLETED IN TIME. RELEVANT PORTION OF THE LETTER DATED 15.12.2009 READS AS UNDER: RE: AVANI PROJECTS AND INFRASTRUCTURE LIMITED (PAN :AAFCA4259H) ASSESSMENT YEAR: 2007-08 FURTHER TO OUR LETTER DATED 15 TH DECEMBER, 2009 IN RESPECT OF DOCUMENTS AT PAGE 24, 26 & 30 OF AD/4 AND PAGE 2 OF AD/6, WE WRITE TO SUBMIT THAT WE HAD ISSUED A CHEQUE BEARING NO.486076 DATED 25 TH SEPTEMBER, 2006 DRAWN ON ANDHRA BANK, BALLYGUNGE BRANCH, KOLKATA FOR RS.2,00,00,000/- IN FAOVUR OF M R. VINOD DUGAR TOWARDS ADVANCE FOR SALWA PROJET. THE CHEQUE WAS NOT PRESENTED TO BANK BY HIM AS HE COULD NOT COMPLETE THE REGISTRATION OF LAND IN TIME. THEREFO RE, THE PROPOSED PARTNERSHIP TERM SHEET IN RESPECT OF THE PROJECT WAS NOT EXECUTED AN D THE PROJECT WAS SHELVED. CONSEQUENTLY THE SAID CHEQUE WAS RETURNED TO US AND CANCELLED. THANKING YOU, YOURS FAITHFULLY FOR AVANI PROJECTS AND INFRASTRUCTURE LIMITED SD/- VINOD KUMAR KHETAN CHIEF ACCOUNTING OFFICER FURTHER, THE LETTER WRITTEN TO MR. VINOD DUGAR DAT ED 27.09.2006 READS AS UNDER DEAR SIR, WE ENCLOSE A CHEQUE BEARING NO.486076 DATED 25 TH SEPTEMBER 2006 DRAWN ON ADHRA BANK, BALLYGUNGE BRANCH, KOLKATA FOR RS.2,00, 00,000/- (RUPEES TWO CRORES ONLY) TOWARDS PART ADVANCE FOR LAND PURCHASE AT SAL WA. THE CHEQUE SHOULD BE PRESENTED BY YOU ON CONFIRMATION AFTER THE STATUS O F REGISTRATION OF LAND IS INFORMED TO US. PLEASE ACKNOWLEDGE RECEIPT THANKING YOU, YOURS FAITHFULLY, FOR AVANI PROJECTS AND INFRASTRUCTURE LTD. SD/- ABHIJIT ROY AUTHORISED SIGNATORY ENCL: AS ABOVE AND FURTHER, MR. VINOD DUGAR RETURNED THE ABOVE STA TED CHEQUE ON 18.10.2006 AND THE RELEVANT TEXT OF THE LETTER READS AS UNDER: 18 TH OCTOBER, 2006 TO AVANI PROJECTS AND INFRASTRUCTURE LTD. AVANI VISION 78, SAMBHUNATH PANDIT STREET, KOLKATA-700 020 DEAR SIR, 5 ITA NO.700/K/2011 AVANI PROJECTS & INFRASTRUCTURE LTD. AY: 2007-08 I AM RETURNING HEREWITH CHEQUE NO. 486076 DATED 25 TH SEPTEMBER, 2006 FOR RS.2,00,00,000/- DRAWN ON ANDHRA BANK WHICH WAS GIV EN TO ME TOWARDS ADVANCE FOR SALVA PROJET. THE CHEQUE WAS NOT DEPOSITED BY ME A S THE PROJECT HAS BEEN MUTUALLY SHELVED. PLEASE ACKNOWLEDGE RECEIPT. YOURS TRULY, SD/- FOR VINOD DUGAR 7. THESE PAPERS ARE ENCLOSED WITH ASSESSEES PAPER BOOK PAGES 6 TO 8. THE ASSESSEE HAS ALSO ENCLOSED BANK STATEMENT SHOWING PAYMENT AND SU BSEQUENT REFUND. FROM THE ABOVE DOCUMENTS AND EVIDENCE IT IS NOTED THAT SEIZED DOCU MENTS NO WHERE MENTIONS THE AMOUNT OF RS.2 CR OVER AND ABOVE THE AMOUNT OF RS.5 CR AS PAI D BY CHEQUE HAS EVER BEEN PAID IN CASH. IN THE BOOKS OF ACCOUNT I.E. LEDGER COPY CLEARLY REVEA LS THAT CHEQUE ISSUED BY ASSESSEE OF RS. 2 CRORE STANDS CANCELLED. WE HAVE EXAMINED THE LEDGE R COPY, BANK BOOK, BANK STATEMENT AND COPIES FILED BEFORE US AND THESE WERE EVEN FILED BE FORE THE LOWER AUTHORITIES, WHICH REVEALS THAT CHEQUE OF RS.2 CR. HAS BEEN ISSUED AND CANCELLED AN D DULY RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. EVEN THE CHEQUE AMOUNTING TO RS.5 CR. REFUNDED BY MR. VINOD DUGAR TO ASSESSEE WAS CANCELLED, BECAUSE THE SALWA PROJECT WAS CANCEL LED. THEREFORE, WE HAVE NO REASON TO DISBELIEVE THE EXPLANATION OF THE ASSESSEE THAT THI S AMOUNT OF RS.2 CR. PAID BY CHEQUE, BUT THE SAME HAS NOT BEEN ENCASHED BY SHRI VINOD DUGAR AND RETURNED BECAUSE THE PROJECT WAS CANCELLED AND CONSEQUENTLY, THIS CHEQUE WAS ALSO CA NCELLED. IN SUCH CIRCUMSTANCES, WE HAVE NO ALTERNATIVE EXCEPT TO ACCEPT THE EXPLANATION OF THE ASSESSEE AND TO DISMISS THIS ISSUE OF REVENUES APPEAL. 8. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A IN RESTRICTING THE DISALLOWANCE AT 1%. FOR THIS, REVENUE HAS RAISED F OLLOWING GROUND NOS. 2 AND 3: 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WHILE AGREEING THAT DISALLOWANCE U/S. 14A OF THE ACT WAS WARRANTED HAS ERRED IN RESTRICTING THE DISALLOWANCE TO 1% OF DIVIDEND INCOME HOLDING T HAT PROVISION OF RULE 8D WILL NOT BE APPLICABLE. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT RULE 8D IS EFFECTIVE FROM AY 2008-09 W ITHOUT CONSIDERING THAT WHILE PASSING ORDER ON 10.07.2009 IN ITA NO. 344/KOL/2009 IN THE CASE OF SANWARMULL SHROFF FOR AY 2005-06 ITAT, KOLKATA HELD THAT PROVISION OF RULE 8 D WILL BE EFFECTIVE RETROSPECTIVELY. 9. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE CIT(A) RESTRICTED THE DISALLOWANCE TO THE EXTENT OF 1% OF EXEMPT INCOME I.E. DIVIDEND INCOME BY RECORDING FOLLOWING FINDING IN P ARA 12 OF HIS ORDER: 6 ITA NO.700/K/2011 AVANI PROJECTS & INFRASTRUCTURE LTD. AY: 2007-08 12. THE APPELLANT FILED ANOTHER SUBMISSION GIVING THEREIN THE SOURCE OF FUNDS OUT OF WHICH INVESTMENTS WERE MADE BY IT. I HAVE ALSO EXA MINED THE SUBMISSION FILED BY THE APPELLANT. I FIND THAT ALTHOUGH THE APPELLANT HAS MADE SUBMISSION IN RESPECT OF THE DISALLOWANCE OF INTEREST ON LOAN BUT NO SUCH DISALL OWANCE HAS BEEN MADE BY THE A.O. WHILE MAKING DISALLOWANCE U/S. 14A. THEREFORE, THE SAID SUBMISSION MADE BY THE APPELLANT REGARDING DISALLOWANCE OF INTEREST IN THE HANDS OF THE APPELLANT IS NOT RELEVANT TO THE CASE OF THE APPELLANT. I HAVE EXAMINED THE DISALLOWANCE MADE BY THE AO AND FIND THAT HE HAS APPLIED RULE 8D WHILE COMPUTING THE DIS ALLOWANCE U/S. 14A. IT HAS BEEN HELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GOD REJ & BOYCEE VS. DCIT 328 ITR 81 THAT RULE 8D IS APPLICABLE ONLY FROM AY 2008-09. T HE ASSESSMENT YEAR BEFORE ME BEING PRIOR TO AY 2008-09, THE PROVISIONS OF RULE 8D ARE NOT APPLICBALE TO THE PRESENT CASE AND HAVE BEEN WRONGLY APPLIED BY THE AO. IN THE CASE O F GODREJ & BOYCEE THE HIGH COURT HAS HELD THAT IN THE ABSENCE OF RULE 8D SOME DISALL OWANCE IS CALLED FOR ON A REAASONABLE BASIS. I FIND THAT THE HONBLE ITAT, KOLKATA HAS B EEN CONSISTENTLY HOLDING THAT DISALLOWING 1% OF THE DIVIDEND INCOME SHALL BE REAS ONABLE FOR THE PURPOSE OF SEC. 14A AND THEREFORE, I ACCORDINGLY DIRECT THAT THE DISALL OWANCE U/S. 14A IN THE CASE OF THE APPELLANT SHALL ALSO BE RESTRICTED TO 1% OF DIVIDEN D INCOME. THE APPELLANT ACCORDINGLY GETS RELIEF OF THE AMOUNT OVER AND ABOVE THE AMOUNT OF 1% OF DIVIDEND INCOME RECEIVED BY THE APPELLANT DURING THE YEAR. 10. THE FACTS ARE UNDISPUTED AND ASSESSEE HAS EARNE D DIVIDEND INCOME. IT IS ALSO A FACT THAT HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ BOY CEE MFG. CO. LTD. VS. DCIT [2010] 328 ITR 81 (BOM.) HAS HELD THAT RULE 8D OF I. T. RULES, 1962 IS PROSPECTIVE AND NOT RETROSPECTIVE. THIS BEING AY 2007-08 IT WILL NOT APPLY. HOWEVER, THE CIT(A) HAS RESTRICTED THE DISALLOWANCE AT 1%, WE CONFIRM THE SAME. THIS GROUND OF REVENUE IS ALSO DISMISSED. 11. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 12. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- . . . . . . . . , ! ! ! ! '! '! '! '! , (P. K. BANSAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( . . . .) )) ) DATED : 20TH MARCH, 2013 /0 '$12 '3 JD.(SR.P.S.) 7 ITA NO.700/K/2011 AVANI PROJECTS & INFRASTRUCTURE LTD. AY: 2007-08 - 4 +''5 65&7- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT DCIT, CC-II, KOLKATA 2 +,)* / RESPONDENT M/S. AVANI PROJECTS & INFRASTRUCTURE LTD., 59A, CHOWRINGHEE ROAD, KOLKATA-700 016. 3 . '-$ ( )/ THE CIT(A), KOLKATA 4. 5. '-$ / CIT KOLKATA 5 <'= +'$ / DR, KOLKATA BENCHES, KOLKATA ,5 +'/ TRUE COPY, -$>/ BY ORDER, ! 2 /ASSTT. REGISTRAR .