TaxTMI 
TaxTMI 
2018 (12) TMI 1132
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....the 'Act'). 2. The 1st ground of appeal Disallowance u/s 14A i. The Ld. CIT(A) erred in law and facts in upholding disallowance of Rs. 7,70,160/- out of expenses u/s 14A of the Act. The reasons given by him for doing so are wrong, contrary to the facts of the case and against the provisions of law. ii. The CIT(A) erred in upholding the disallowance u/s 14A of Rs. 7,70,160/-without appreciating that in a case where no exempt income has been earned or received by an assessee, the provisions of section 14A cannot apply. iii. The CIT(A) erred in law and facts in disallowing expenses of Rs. 7,70,160/-without proving live nexus between expenses and exempt income and none of the expenses are proved to have be....
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....ed the disallowance of Rs. 55,09,038/- estimated by the AO for disallowance u/s 14A. However, the Ld. CIT(A) directed the AO to restrict the disallowance to Rs. 7,70,160/- made suo motu by the assessee. 5. Before us, the Ld. counsel of the assessee submits that the assessee has not earned any exempt income during the year and therefore, no disallowance u/s 14A is called for. On the other hand, the Ld. DR supports the order passed by the Ld. CIT(A). 6. We have heard the rival submissions and perused the relevant materials on record. In view of the decision of the Hon'ble Delhi High Court in the case of Cheminvest Ltd. v. CIT 378 ITR 33, no expenses can be disallowed u/s 14A as the assessee has not earned any exempt income. Same view....
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....e, the AO made an addition of the difference of CENVAT credit of Rs. 3,55,56,741/- to the total income shown by the assessee. 9. In appeal, the Ld. CIT(A) directed the AO to give credit as per law in pursuance to the ITAT's order dated 12.02.2014 in appellant's own case (ITA No. 1327/Mum/2012) which reads as under: "The Ld. counsel for the assessee submitted that the adjustment has to be made on the purchases also. We agree with the contentions of the Ld. counsel that for the purpose of valuation of purchase and sale of goods and inventories adjustment on account of tax, duty, cess or fee, actually paid or incurred by the assessee has to be made in view of the provisions of section 145A of the Act. Thus, the AO is directed to ma....
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....e that the value of opening and closing stock reflect the correct value, a new section 145A is inserted. The section provides that the valuation of purchase, sale and inventory shall be made in accordance with the method of accounting regularly employed by the assessee and such valuation shall be further adjusted to include the amount of any tax, duty, cess or fee (by whatever name called), actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation." From the said circular it is apparent that the main object to introduce section 145A is to ensure that value of opening and closing stock reflect the correct value so that there is no unnecessary litigation. The a....