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2018 (12) TMI 1664 - AT - Income TaxTP Adjustment - Comparable selection - HELD THAT:- Accentia Technologies Ltd. company is having its revenue from three sources, namely, medical transcription, coding and software development. Thus due to non-availability of segmental information and extraordinary events occurred during the year, this company cannot be considered as comparable. Cat Technologies Ltd. - this company is primarily a software development company and, therefore, in absence of segmental information, this cannot be compared with the assessee company as a comparable. The various decisions relied on by the ld. counsel also supports his case. Under these circumstances, we do not find any infirmity in the order of the CIT(A) in excluding this company from the list of comparables. Denial of opportunity to the TPO before admitting the additional evidence in case of Accentia Technologies Ltd., regarding acquisition, etc. - we find the same is without any merit. All these details are very much available in the audited accounts in the form of Notes to Accounts, therefore, there was no necessity of giving any opportunity to the Assessing Officer. Therefore, the ground No.2 raised by the Revenue is also dismissed. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- It is an admitted fact that the assessment year involved in A.Y. 2007-08. Therefore, in view of various decisions, the provisions of Rule 8D are not applicable for assessment year 2007-08. Therefore, the action of the AO in applying the provisions of Rule 8D is incorrect. However, since the assessee has earned dividend income of ₹ 2,52,976/- and has substantial investment in shares of various companies, therefore, it cannot be said that no expenditure has been incurred by the assessee for making the investment and earning the exempt dividend income. Disallowance on estimate for this year under the facts and circumstances of the case will meet the ends of justice. We, therefore, modify the order of the CIT(A) and direct the Assessing Officer to disallow an amount of ₹ 30,000/- u/s 14A of the IT Act. Ground No.8 is accordingly partly allowed. Double disallowance being loss on sale of fixed assets since the said loss was suo moto disallowed by the assessee - HELD THAT:- We restore this matter to the file of AO with a direction to verify the claim of the assessee and adjudicate the issue afresh. Needless to say, the Assessing Officer shall give due opportunity of being heard to the assessee and decide the issue as per the fact and law. Ground of appeal No.9 is accordingly allowed for statistical purposes.
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