In a mixing bowl, combine ingredients and add 1 cup boiling water last. Mix well. grease and flour 2 9 inch cake pans, bake at 350 degrees 35-40 minutes or until a toothpick inserted in the middle comes out clean. Cool completely on wire racks.
For the frosting; In a saucepan add the butter, cocoa and milk. Bring to a boil for 1 minute then add; powder sugar mixture and vanilla; stir until smooth and creamy.