TaxTMI 
TaxTMI 
2012 (3) TMI 100
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.... three separate headings. ISSUE NO. 1 - Valuation of Closing Stock 2. Three substantial questions of law are framed:- "1. Whether on the facts and circumstances of the case the Income Tax Appellate Tribunal was correct in law and on facts in deleting the addition made by Assessing Officer on account of rejection of method of valuation of closing stock as followed by the assessee ? 2. In case the answer to question No.1 above is in the negative whether the change in the method of valuation was bonafide?" 3. Whether the Income Tax Appellate Tribunal was right in accepting the net realizable value as declared by the respondent-assessee and was right in not adopting the cost price for computation of the closing stock?" 3. S....
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.... with the exempt income earned and there was no commission or remuneration paid to a banker or any other person for realizing dividend or tax free bond interest. 7. The Assessing Officer, however, did not accept the said contention, inter alia, observing as under:- "The assessee has shown total receipt of Rs.165,62.72 lakhs which inter alia comprises of income of Rs.188.34 lakhs from tax free bonds/mutual funds. The assessee has incurred expenditure of Rs.189.93 lakhs being the bank interest paid and Rs.599.44 lakhs being the administrative expenses. Looking into the nature and extent of income, it is seen that expenses have been incurred for the purposes of earning the aforementioned income for the following reasons:- (i) A la....
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....nbsp; 1,55,67,77,758/- [General surplus + Loans] [1460745195 + 96032563] Interest related to exempted income = 18993385 x 782933269 = 95,52,136/- (A) 1556777758 (2) Administrative expenses (Rs.5,99,44,162/-) Total Receipts 1,65,62,72,129/- Exempted Receipts &nb....
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....king credit limit and from Syndicate Bank export credit limit. In view of the above facts, as no interest has been paid by the appellant company for making investment in the earning of the exempt income the AO has wrongly disallowed a sum of Rs.95,52,136/-on account of interest and the same is deleted. Regarding the proportionate disallowance of administrative expenses to the amount of Rs.6,81,673/- as it cannot be said that no expenses had been incurred under this head for earning the exempt income the same has been rightly disallowed by the assessing officer. Therefore, the addition of Rs.95,52,136 is deleted and addition of Rs.6,81,673/- is confirmed." 9. The Revenue preferred an appeal against the deletion of addition of Rs.95,52,136....
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.... packing credit limit, for which additional evidence was filed before the learned CIT(Appeals), and which was rightly admitted by him. He decided the matter after hearing the AO also in the matter. His finding could not in any way be displaced by the learned DR before us. Therefore, it is held that no part of interest expenditure could be disallowed u/s 14A." 10. In view of the aforesaid factual position, we do not find that an order of remit on the question of disallowance of interest paid u/s 14A of the Act is required to be passed. The instruments resulting in tax free income were purchased the earlier years, whereas the bank loan was availed of in the present year. Further the bank loan was for a specific purpose, i.e. export of suga....