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2018 (5) TMI 57 - AT - Income TaxDisallowance u/ s 14A r.w.r. 8D - Held that:- AO has failed to point out the defect in the computation made by the assessee to make suo motu disallowance of ₹ 10,86,161/-. So, when the AO has not brought on record any cogent reasons to reject the suo motu disallowance made by the assessee, further disallowance made by the AO is merely on the basis of surmises by giving mechanical interpretation to the provisions contained u/s 14A read with Rule 8D - Disallowance u/s 14A cannot exceed the amount of exempt income as has been held in CIT vs. Holcim India Pvt. Ltd. (2014 (9) TMI 434 - DELHI HIGH COURT) so we are of the considered view that the CIT (A) has rightly deleted the disallowance made by the AO u/s 14A. - Decided in favour of assessee. Disallowance on account of CSR expenses - Held that:- Hon’ble Karnataka High Court in case cited as CIT & Anr. Vs. Infosys Technologies Ltd. [2013 (7) TMI 451 - KARNATAKA HIGH COURT] allowed the expenditure incurred by Infosys Technologies Ltd. on account of CSR by installing traffic signal near the establishment to ease the traffic congestion u/s 37(1) of the Act by holding that such expenses can be held to be expanded wholly and exclusively for the purpose of business u/s 37(1) of the Act. Addition u/s 145A - Held that:- Hon’ble Supreme Court in CIT vs. Hindustan Zinc Ltd. [2007 (5) TMI 195 - SUPREME Court] and CIT vs. Loknete Balasaheb Desai SSK Ltd. (2011 (6) TMI 48 - BOMBAY HIGH COURT), we are of the considered view that the ld. CIT (A) has rightly deleted the addition u/s 145A of the Act made by the AO as the central excise duty on the stock lying in the goddown is not to be incurred unless the stock is removed. So, we find no illegality or perversity in the findings returned by the dl. CIT (A). Ground no.3 is determined against the Revenue. Addition of expenses on account of sales-tax written off made u/s 37(1) - Held that:- CIT (A) by following the decision rendered by the Sales-tax Tribunal as well as Hon’ble Allahabad High Court in assessee’s own case held that transfer of goods from Sahibabad, UP to Murthal, Haryana, was in the nature of central sale and as such liable to pay Central Sales-tax and is not a penalty for violation of Sales-tax Act as has been held by the AO. Moreover, items/goods transferred by the assessee from Sahibabad, UP to Murthal, Haryana were not semi-finished goods rather it were final and finished products. So, we find no illegality or perversity in the impugned order passed by ld. CIT (A), hence ground no.4 is determined against the Revenue.
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