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2014 (1) TMI 894 - AT - Income TaxRevision u/s 263 of the Act - Wrong set off of short term capital loss against business income – Held that:- If in a given year, the mistake committed by the Assessing Officer is such which results into the reduction of the total income, the assessment order would be called as erroneous and prejudicial to the interest of the revenue notwithstanding the fact that in the subsequent years the effect of the mistake is neutralized - It is each year as a separate unit which has to be considered for the purposes of section 263 for examining as to whether or not the assessment order is erroneous and prejudicial to the interest of the Revenue – Revision is justified. Disallowance made u/s 14A of the Act – Held that:- The assessee did earn exempt income but did not offer any disallowance u/s 14A - Even if the assessee made investment in securities out of own funds, the disallowance on account of “other expenses” was called for u/s 14A - The Assessing Officer did not consider the application of section 14A – As held in Godrej & Boyce Ltd. Mfg. Co. v. DCIT 2010 (8) TMI 77 - BOMBAY HIGH COURT] disallowance is required to be made on some 'reasonable basis’ under the circumstances which are prevailing – Revision in justified. TDS and income reconciliation not done - The Assessing Officer, while giving effect to the order u/s 263, did not make any addition on this score – Thus, no grievance can be said to have been resulted to the assessee by reason of the restoration of this issue by the learned CIT to the A.O. Valuation of closing stock – Held that:- The assessee did not follow the prescription of section 145A as per which the valuation of inventory is required to be done in 'inclusive’ manner – but, the assessee valued its inventory of raw material on 'exclusive’ basis by not including the amount of Cenvat – as decided in CIT Vs. Mahalaxmi Glass Works Pvt. Ltd. [2009 (4) TMI 182 - BOMBAY HIGH COURT ] where in the closing stock unutilized Modvat credit is adjusted, similar adjustment should be made to the opening stock also - Nowhere it has been held that despite the mandate of section 145A, the stock should be valued as per 'exclusive’ method - the assessment order accepting the same cannot be held to be valid. Reconciliation of Purchase and sale of investment – Held that:- The Assessing Officer u/s 143(3) read with section 263, has accepted the assessee’s contention on this point and did not make any addition - there can be no reason on the part of the assessee to assail this issue further – Decided partly in favour of Assessee.
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