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2016 (7) TMI 822 - AT - Income TaxSuppression of sales - CIT(A) deleted the addition - Held that:- A perusal of the assessment order, we find that the AO failed to bring any evidence on record which can suggest suppression of sales made by the assessee. The assessee was showing an income of more than ₹ 7 crores in its return. It could not file confirmation from two scrap purchases having value roughly of ₹ 40 lakhs only. The ld.AO has calculated this aspect in such manner suggesting that the assessee has sold finished goods, but there is no evidence with the AO to that effect. We failed to understand on what basis the AO has drawn this inference. On the other hand, the ld.CIT(A) has observed that quantitative Excise record was maintained by the assessee, and they were subject to the audit by the Excise Department. Its product is excisable. It is not the case that the assessee has avoided excise duty or some evidence was found, exhibiting the avoidance of excise duty. Therefore, after taking into consideration the above finding, we do not find any reason to interfere with the order of the ld.CIT(A) on this issue - Decided against revenue Disallowance made by the AO under section 14A - CIT(A) has reduced the disallowance - Held that:- The order of the ld.CIT(A) need not to be interfered with for two reasons, viz. (i) Hon’ble Gujarat High Court in the case of CIT Vs. CIT V/s Corretech Engineering (P) Ltd, [2014 (3) TMI 856 - GUJARAT HIGH COURT ] has held that if no exempt income is there during the year, no disallowance under section 14A can be made. Similarly, Rule 8D was not applicable in the Asstt.Year 2007-08. The Hon’ble Delhi High Court in the case of Maxo Maxopp Investment Ltd. vs. CIT [2011 (11) TMI 267 - Delhi High Court ] and Godrej & Boyce Mfg. Co. Ltd. [2010 (8) TMI 77 - BOMBAY HIGH COURT ] has held that Rule 8D cannot be applied with retrospective effect. It is applicable from the Asstt.Year 2008-09. Therefore, no disallowance can be on the basis of Rule 8D.- Decided against revenue
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