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2015 (6) TMI 412 - AT - Income TaxDisallowance under section 14A - Held that:- The straightway application of rule 8D in the case of the assessee by the lower authorities is not sustainable. Taking into consideration the overall facts and circumstances of the case, in our view, the expenses equal to 4 per cent. of the exempt income earned by the assessee would constitute reasonable disallowance and the same is restricted to that extent accordingly. - Decided partly in favour of assessee. Addition of amount to the closing stock - there is no tax implication even if the "inclusive method" prescribed in section 145A of the Act is followed as contested by assessee - Held that:- The assessee has not furnished working to show that the "net profit" remained the same under both the "inclusive method" and the "exclusive method". Since the assessee has followed the guidance note issued by the Institute of Chartered Accountants of India, it would be in a position to demonstrate the abovesaid fact before the Assessing Officer, i.e., the assessee could establish that there was no change in the income under both methods by furnishing necessary workings. Accordingly, we are of the view that the assessee should be given one more opportunity to demonstrate this fact. - Decided in favour of assessee for statistical purposes.
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