Harisankar V. Menon, J.

This appeal under Section 260A of the Income Tax Act , 1961 (hereinafter referred to as the ‘Act’ for short), at the instance of the assessee, seeks to challenge the order dated 19.05.2020 in I.T.A No.60/COCH/2015 of the Income Tax Appellate Tribunal, Cochin Bench with respect to the assessment year 2006-07 relevant to the financial year 2005-

06.

2. The assessment for the year 2006-07 was subjected to re-assessment steps on various grounds. One such ground is with reference to the provisions of Section 14A of the Act, which provides for disallowing deductions with respect to expenditures incurred in relation to income which does not form part of the total income under the Act. The assessing authority noticed that the appellant-assessee made long-term investments in subsidiary companies and, by applying the ratio prescribed under Rule 8D of the Income Tax Rules , 1962 (hereinafter referred to as the ‘Rules’ for short), disallowed a claim for deduction of Rs.18,43,500/-. The first appeal was unsuccessful. The second appeal was instituted before the Tribunal, contending that Rule 8D of the Rules has no application regarding the assessment year 2006-07, as it