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2016 (4) TMI 823 - AT - Income TaxAdhoc disallowance made u/s. 14A of the Act for computing book profits u/s. 115JB of the Act - Held that:- As relying on GODREJ AND BOYCE MFG. CO. LTD. Versus DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER [2010 (8) TMI 77 - BOMBAY HIGH COURT] issue is Decided against assessee Disallowance u/s 14A - Held that:- Assessee had not used borrowed funds to earn exempt income, that the FAA discussed the issue at length and held that there was no evidence to prove that the assessee had not used its own funds for earning exempt income. In these circumstances, we are of the opinion that there is no legal infirmity in the order passed by the FAA as far as interest expenditure is concerned. We further find that FAA had restricted the administrative/managerial disallowance@ 1%. The AO had not given any reason for making the disallowance. Therefore, confirming the order of the FAA, we decide the effective GOA against the AO. Addition u/s 41 - difference between the sales tax liability and the net value paid under a scheme of Govt. of Maharashtra - Held that:- Deferred sales tax liability being the difference between the payment of net present value against the future liability credited by the assessee under the capital reserve account in its books of account was a capital receipt and could not be termed as remission/cessation of liability and, consequently, no benefit would arise to the assessee in terms of section 41(1)(a) - Decided against the AO.
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