Facts of the case:
AO had disallowed the expenses u/s 14A by applying the rule 8D for the A.Y 07-08 but the assessee argued and gave the supporting of the decided case law byÂ Honâ€™ble High Court in its own decision in which it was decided that the sec 14A would be applicable from A.Y 08-09Â and it would not have any retrospective effect.
Contention of the assessee:
Assessee was of the view that the rule 8D of sec 14A would be applicable from A.Y 08-09 but not from A.Y 07-08 which was supported by the Honâ€™ble High CourtÂ in asseeseeâ€™s own case in which it was decided that the rule 8D would be applicable from A.Y 08-09 not from A.Y 07-08 and had no retrospective effect.
Contention of the Revenue:
Revenue was of the view that the rule 8D was applicable in A.Y 07-08 alsoÂ because it had a retrospective effect. So the same would be disallowed .
Held by the respective court:
Court had held that the Honâ€™ble Gujrat High Court in assesseeâ€™s own case held that the held that provisions of Rule 8D are applicable from A.Y. 2008-09 and had not retrospective effect. Therefore there was mistake in the ITAT order so the same should be recalled by the ITAT.