TaxTMI 
TaxTMI 
2016 (5) TMI 1546
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....s and perused the material available on record. In view of the above, we are reproducing hereunder the relevant portion from the aforesaid order dated 20/02/2015 for ready reference:- " 3. The ground No.1(a) is relating to disallowance under section 14A of the Income Tax Act. During the assessment proceedings the Assessing Officer (hereinafter referred to as the AO) noticed that the assessee has earned sufficient exempt income. He therefore made the disallowance under section 14A of the Income Tax Act applying Rule 8D of the Income Tax Rules. The DRP also directed the AO to compute the said disallowance as per the provision of Rule 8D of the Income Tax Rules. 4. We have heard the learned representatives of both the parties and have also gone through the records on this issue. It may be observed that in the case of Godrej & Boyce Manufacturing Co. Ltd. (supra) the Hon'ble Bombay High Court has held that Rule 8D r.w.s. 14A(2) is not arbitrary or unreasonable but can be applied only if the assessee's method is not satisfactory. It has been further held that Rule 8D is not retrospective and applies from A.Y. 2008-09. For the years for which Rule 8D is not applicable and i....
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....f Rs. 2,10,08,937/- to the value of closing stock u/s 145A of the Act on account of cenvat credit in respect of goods other than capital goods. The crux of argument on behalf of the assessee is that this issue also covered by the aforesaid decision of the Tribunal dated 20/02/2015. It was also explained that the assessee is regularly followed the exclusive method. This factual matrix was consented to be correct by the ld. DR. 3.1. We have considered the rival submissions and perused the material available on record. In view of the above, we are reproducing hereunder the relevant portion from the aforesaid order of the Tribunal dated 20/02/2015 for ready reference and analysis:- "9. Vide ground No.2(a), the assessee has agitated the addition of Rs. 14,728,838/- to the value of the closing stock under section 145A of the Act on account of CENVAT credit and service tax credit. The assessee alternatively, vide ground No.2(b), has contended that if the above amount is to be added to the closing stock, the AO ought to have added Rs. 11,801,670/- to the opening stock on account of addition made to closing stock for assessment year 2005-06 as per assessment order dated 15.12.06. 1....
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....h the above said amount. 13. The DRP has however held that the opening stock should be increased by Rs. 52,33,736/- only, since (the remaining amount apparently pertain to Service tax) does not form part of cost of goods. 14. We have already noticed that the valuation of purchase and sale of goods and inventory is required to be adjusted to include only with the amount of tax, duty, cess or fee (by whatever name called) actually paid or incurred to bring the goods to the place of its location and condition on the date of valuation. If the DRP is taking the view that "Service tax" does not form part of cost of goods, apparently meaning that the same was not incurred to bring the goods to the place of its location and condition on the date of valuation, then the DRP should not have upheld the adjustment of Rs. 46,86,174/- pertaining to the Service tax portion to the value of closing stock. Thus, it is seen that there is apparent contradiction in the approach of the DRP. 15. The main contention of the assessee is that there is no tax implication even if the "inclusive method" prescribed in sec. 145A of the Act is followed. However, the assessee has not furnished workings to s....
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....antiate its claim, before us, therefore, we affirm the stand of the Ld. Commissioner of Income Tax (Appeal) and decide this ground against the assessee. 5. The next ground pertains to making addition of Rs. 63,28,864/- u/s 40(a)(ia) of the Act being proportionate amount on which tax was deducted at lower rate. The ld. counsel for the assessee contended that for short deduction, no disallowance is to be made for which he place reliance upon the decision from Hon'ble Kolkata High Court in CT vs S.K. Tekriwal (2014) 361 ITR 432 (Cal.) and the decision of the Tribunal in DCIT vs Chanda Bhoy and Jassobhoi (2012) 17 taxmanc.om 158 (Mum.). This factual matrix was not controverted by the ld. DR. 5.1. We have considered the rival submissions and perused the material available on record. We find that so far as, the issue of short deduction of TDS is concerned, the ld. DRP has discussed this issue at page-13, para-8.1 onwards of the order. The assessee deducted tax at source at lower rate than required under the provisions of the Act. The ld. Assessing Officer did not accept the explanation of the assessee, thus, he allowed the claimed deduction of expenses to the extent of TDS made and....