TaxTMI 
TaxTMI 
TaxTMI 
2021 (5) TMI 237
X X X X Extracts X X X X
X X X X Extracts X X X X
....) has erred in confirming the same. On the facts and circumstances of the case, the order passed exparte was bad in law and therefore is liable to be quashed. 2. The learned Assessing Officer had also erred in disallowing a sum of Rs. 6,18,080/-under rule 8D(2)(ii) read with section 14A of the I.T. Act, 1961 and the learned Commissioner of Income tax (Appeals) has erred in confirming the same on the facts and law applicable, the disallowance as made being erroneous is to be deleted. 3. On the facts and circumstances of the case, the Assessing Officer had erred in making a disallowance of Rs. 7,11,040/- U/s. 14A read with rule 8D(2)(iii) of the I.T. Act, 1961 and the learned Commissioner of Income tax (Appeals) has erred in partially con....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the assessee before the AO. At the time of hearing, no argument has been put by the AR of the assessee on this issue. Being so, this ground is dismissed as not pressed. 4. The next ground is with regard to disallowance under section 14A r.w.r. 8D(2)(ii). The facts of the issue are that during the Assessment Year under consideration, assessee received dividend of Rs. 4,180/- which was claimed as exempted income under section 10(38) of the Act. The assessee is said to be incurred no expenditure to earn this income. However, the AO invoked the provisions of section 14A r.w.s. 8D and disallowed a sum of Rs. 13,31,120/-. Against this, assessee carried the appeal to CIT(A). With regard to applicability of Rule 8D(2)(ii), the CIT(A) observed th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wer authority. 6. We find force in the argument of learned AR that disallowance under section 14A r.w.r. 8D cannot go beyond the extent of exempted income itself. This view is fortified by the judgment of Madras High Court in the case of CIT Vs. Chettinad Logistics (P.) Ltd., 80 taxmann.com 221 and also by judgment of Delhi High Court in the case of Joint Investments (P) Ltd vs. CIT 372 ITR 694. Following the aforesaid decision of the Madras High Court in the case of Envestor Ventures Ltd., (supra), deleted the disallowance made under section 14A r.w.r. 8D. Same view was taken by Co-ordinate Bench in the case of Global Teck Park Pvt. Ltd. Being so, taking a consistent view, we are inclined to hold that disallowance in the case of assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ount under the head "difference in closing and opening stock". This forms part of assessee's transition entries from AS 7 to AS 9. This amount has been disallowed on the ground that the year in which closing inventory was part of assessee's P & L account, the assessee had claimed deduction under section 80IB(10) of the Act. Therefore, in the Assessment Year under consideration when the inventory values are reduced on account of transition, no deduction should be allowed. According to learned AR, the assessee had claimed benefit under section 80IB(10) in earlier Assessment Year only to the tune of Rs. 27,80,57,341/- and the balance amount of Rs. 1,18,83,207/- not pertained to the project which entitled for exemption under section 80IB(10) of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al is partly allowed. 10. The next ground in this appeal is with regard to addition of Rs. 13,90,45,559/- under the caption unexplained reduction in closing work in progress. The facts of this issue are that the AO disallowed a sum of Rs. 13,90,45,559/- on account of unexplained deduction in closing work in progress. The AO worked out reconciliation of opening and closing inventory and made following working: As per para 17 of the Assessment order Remarks of the appellant Particulars Amounts (Rs.) Closing stock of WIP 105,88,55,614 Add: Project Expenses of Project Mahaveer 23,41,57,587 The net result of Mahaveer project i.e. loss of Rs. 8,20,29,841 [23,41,57,587 (-) 15,21,27,756J has already been disallowed under para....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Already disallowed under para 16 of the Asst. Order Unexplained reconciliation Nil 12. Thus, he submitted that there was a difference of Rs. 8,20,29,838/- on account of change in following of accounting standard from AS 7 to AS 9 in the valuation of closing work in progress and that was already disallowed by AO in his order in para 16 by observing as follows and once again disallowing this difference of Rs. 8,20,29,838/- amounting to double disallowance, which should be disallowed: "15. As above, it is seen that the total revenue is taken at Rs. 168.78 crores and the cost is taken at Rs. 117.07 crores. The profit arrived at thereon at Rs. 51,70,81,586/- has already been claimed as deduction u/s. 801B(10) in earlier years from ....