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2022 (6) TMI 1373 - AT - Income TaxDisallowance of mark to market loss - whether loss arising out valuation of stock-in-trade (also termed as marked to market loss in this case) is allowable as deduction or not? - HELD THAT:- As relying on case of M/s. Edel Commodities Limited [2018 (4) TMI 562 - ITAT MUMBAI] we hold that the claim made by the assessee is allowable as deduction. Accordingly, we direct the AO to delete this disallowance. MAT computation - AO has added the above said amount to the net profit while computing book profit u/s 115JB of the Act treating it as “contingent liability” - HELD THAT:- In the preceding paragraph, we have held that it is not a contingent liability and accordingly we direct the AO to delete addition of the above said amount made in computing book profit u/s115JB of the Act. Disallowance made u/s 14A - HELD THAT:- There is no dispute with regard to the fact that the assessee did not earn any exempt income during the year under consideration. The Hon’ble Delhi High Court has held in the case of PCIT vs. IL & FS Energy Development Company Ltd (2017 (8) TMI 732 - DELHI HIGH COURT] has held that the no disallowance u/s 14A of the Act was called for in case of no exempt income earned by the assessee. Accordingly, we direct the AO to delete the disallowance made u/s 14A of the Act for computing total income under normal provisions of the Act. AO has added the amount of disallowance computed as per Rule 8D r.w.s. 14A of the Act to the net profit while computing book profit u/s 115JB - In the instant case, the assessee has not earned any exempt income. Hence the question of making any addition under clause (f), referred above, does not arise. Accordingly, we direct the AO to delete the addition made to the net profit while computing book profit u/s 115JB. Adjustment made in respect of specified domestic transactions - A.R submitted that the clause (i) of sec. 92BA has been omitted by the Finance Act, 2017 w.e.f. 1st July, 2017 without making any ‘saving clause’ and hence the said omission shall have retrospective effect as if the said clause was never in existence - HELD THAT:- As relying on TEXPORT OVERSEAS (P.) LTD. [2019 (12) TMI 1312 - KARNATAKA HIGH COURT], MAHINDRA TWO WHEELERS LTD [2022 (8) TMI 482 - ITAT MUMBAI] we hold that the reference made to TPO under clause (i) of sec.92BA is not valid and consequently, the transfer pricing adjustment made in respect of Specified Domestic Transaction is liable to be deleted. Accordingly, we direct the AO to delete the transfer pricing adjustment. As issue is required to be examined afresh in terms of sec. 40A(2)(a) of the Act. Accordingly, we restore this issue to the file of the AO with the direction to examine the claim of expenditure mentioned above in terms of the provisions of section 40A(2) of the Act.
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